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The following is a press release from Moody's Investors Service: Approximately $1 billion of rated debt affected New York, June 14, 2010 -- Moody's Investors Service affirmed Pride International, Inc.'s (Pride) Ba1 Corporate Family Rating and the Ba1 ratings on its senior notes outstanding. Moody's lowered the company's Speculative Grade Liquidity (SGL) Rating to SGL-3 from SGL-1. The rating outlook continues to be positive. "The lower SGL rating reflects our expectation that Pride will require additional debt capital over the next twelve months to complete its three drillships under construction," commented Pete Speer, Moody's Vice President. "This will significantly increase the company's leverage but we expect Pride's metrics to improve to investment grade ranges as the new rigs commence operations." The deterioration in dayrates and utilization in jackup and midwater rigs over the past year has reduced Pride's earnings and cash flows. The company has also increased its planned capital spending on the new rigs for additional equipment requested by customers and for spare equipment. The additional equipment will be reimbursed through higher dayrates, but those cash inflows will be spread across the term of the contracts. These factors have combined to require at least $500 million of debt funding to complete the three remaining drillships over the course of 2010 and 2011. This will increase Pride's Debt/EBITDA to around 3.5x by the end of this year. The positive outlook reflects our expectation that the commencement of earnings from Pride's three contracted drillships will generate sufficient earnings to improve the company's leverage metrics to ranges consistent with a Baa3 rating. Pride's ratings could be upgraded once the first drillship begins generating full revenues under its existing contract and our outlook for the company's earnings and cash flows indicates that Pride can achieve and sustain Debt/EBITDA below 3x. An important consideration for establishing that earnings outlook will be more clarity on the regulatory changes emanating from the Deepwater Horizon disaster and its effects on the US Gulf of Mexico and other global drilling markets. The outlook could be returned to stable if there are substantial delays in the new drillships commencing operations under their contracts with BP plc due to matters arising in the rig acceptance testing or other issues related to regulatory changes connected to the Deepwater Horizon disaster and consequent oil spill. Such delays, regulatory changes in other global offshore markets or weaker than anticipated earnings on the existing fleet could result in additional funding shortfalls to complete the drillship construction and pressure the outlook. Pride's SGL-3 rating reflects our expectation of adequate liquidity over the next twelve months. As of March 31, 2010, the company had $347 million of cash and a $320 million revolving credit facility that is fully available and matures in December 2011. The company should maintain good headroom under its covenants and all but two of its rigs are unencumbered. Pride will have significant negative free cash flow over the remainder of 2010 and 2011 to fund the estimated $1 billion of capital expenditures necessary to complete the three drillships and therefore we expect the company to access the debt markets to meet this funding need while maintaining substantial availability on its revolver for liquidity needs. The last rating action was on May 28, 2009, when Pride's Ba1 CFR was affirmed with a positive outlook and a Ba1 rating was assigned to its $500 million senior notes offering. The principal methodology used in rating Pride was Moody's Global Oilfield Services Rating Methodology, published in December 2009 and available on www.moodys.com in the Rating Methodologies sub-directory under the Research and Ratings tab. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Rating Methodologies sub-directory on Moody's website. Pride International, Inc. is a global offshore drilling contractor headquartered in Houston, Texas. Copyright 2010 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved. CREDIT RATINGS ARE MOODY'S INVESTORS SERVICE, INC.'S ("MIS") CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MIS DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS DO NOT CONSTITUTE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS ARE NOT RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. CREDIT RATINGS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MIS ISSUES ITS CREDIT RATINGS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. Under no circumstances shall MOODY'S have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error (negligent or otherwise) or other circumstance or contingency within or outside the control of MOODY'S or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if MOODY'S is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The ratings, financial reporting analysis, projections, and other observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. Each user of the information contained herein must make its own study and evaluation of each security it may consider purchasing, holding or selling. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER. MIS, a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MIS have, prior to assignment of any rating, agreed to pay to MIS for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS's ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading "Shareholder Relations - Corporate Governance - Director and Shareholder Affiliation Policy." Any publication into Australia of this Document is by Moody's affiliate Moody's Investors Service Pty Limited ABN 61 003 399 657, which holds Australian Financial Services License no. 336969. This document is intended to be provided only to wholesale clients (within the meaning of section 761G of the Corporations Act 2001). By continuing to access this Document from within Australia, you represent to Moody's and its affiliates that you are, or are accessing the Document as a representative of, a wholesale client and that neither you nor the entity you represent will directly or indirectly disseminate this Document or its contents to retail clients (within the meaning of section 761G of the Corporations Act 2001). This credit rating is an opinion as to the creditworthiness or a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be dangerous for retail investors to make any investment decision based on this credit rating. If in doubt you should contact your financial or other professional adviser. (END) Dow Jones Newswires June 14, 2010 14:36 ET (18:36 GMT)