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Rowan Companies: Fighting the Downturn

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Mar. 15 2018, Updated 9:02 a.m. ET

Fighting the downturn

To fight the downturn, offshore drillers (XLE) are focused on managing their debt and liquidity. In this part, we’ll discuss Rowan Companies’ (RDC) latest efforts to manage its debt and liquidity.

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Managing debt

In 4Q17, Rowan Companies didn’t retire any debt. In 2017, the total debt retired was $170 million. Since the downturn started in 4Q15, Rowan Companies has retired $780 million of debt.

Debt profile

As of December 31, 2017, Rowan Companies has long-term debt of $2.5 billion. The company doesn’t have any debt maturities in 2018. In 2019, Rowan Companies has $201 million of debt maturity. For Rowan Companies, 67% of the debt maturities come after 2022.

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Liquidity

Rowan Companies has liquidity of $2.8 billion—including $1.3 billion in the form of cash and $1.5 billion in the form of revolving credit.

Credit rating

Rowan Companies has a credit rating of “B2,” which is lower than Diamond Offshore’s (DO) credit rating of “Ba3” and higher than most of the other offshore drillers (OIH). Noble (NE) has a “B3” rating—the same as Ensco (ESV). Moody’s confirmed a “Caa2” rating on Seadrill Partners (SDLP) and changed the outlook to “stable” from “negative.”

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