Moody's Investors Service upgraded the senior unsecured debt ratings of Transocean Offshore
, Inc. to A3 from Baa1 to reflect the significant benefits that the company will likely derive from its pending merger with Sedco Forex Holdings
The rating action ends a review of Transocean's ratings initiated on July 12 in response to the company's announcement that it had signed a definitive agreement under which Sedco, the offshore contract drilling business of Schlumberger Limited, will be spun off and combined promptly with Transocean through the issuance of approximately $3.2 billion of Transocean stock and the assumption of about $435 million of debt. The combined company will be known as Transocean Sedco Forex.
The merger has been approved by both companies' shareholders and is expected to close by Dec. 31, 1999.
The rating outlook is stable.