© 2024 Arizent. All rights reserved.

CLOs Exposed to 5 of 11 Drilling Cos Under Review by Moody's

Five of the 11 offshore drilling companies put under review for a ratings downgrade by Moody’s Investors Service this week have loans that are held in outstanding collateralized loan obligations, according to Wells Fargo.

In a report published Friday, the bank listed these drillers as Transocean (currently rated ‘Ba1’ by Moody’s), Seadrill Partners (Ba3), Ocean Rig UDW (B2), Paragon Offshore (B2), and Pacific Drillings (B3).

A total of 445 CLOs have exposure to at least one of the five companies under review. By volume, Ocean Rig is the largest CLO holding among the five under-review companies, at $961.4 million across 281 funds. CLO holdings of Pacific Drillings S.A. total $415.4 million across 173 funds.

Although many funds are exposed to these names, the average exposure among CLOs to any one of the potentially downgraded companies is limited at just 0.55%; the maximum exposure of any fund to all five is 4.37%, according to Wells Fargo.

Moody’s also downgraded two energy sector companies—Breitburn Energy Partners (B2) and Parker Drilling Co. —although CLOs have limited exposure to these two companies.

For reprint and licensing requests for this article, click here.
MORE FROM ASSET SECURITIZATION REPORT