Temasek-backed driller amends bonds second time amid oil rout

[MEXICO CITY] Integradora de Servicios Petroleros Oro Negro, a Mexican oil-rig operator partly owned by Singapore's Temasek Holdings Pte, is again amending bond covenants as it struggles to win new contracts.

Noteholders agreed at a meeting Tuesday on changes to the company's US$175 million of securities that come due in December, for a second time this year. Oro Negro failed to revalue its newest rig by an Aug 31 deadline as it tries to lease the asset to state-owned Petroleos Mexicanos by year-end, according to a statement.

Oil explorers are cutting back spending after crude prices slid below US$40 a barrel in August. In response, Pemex has separately cut the daily lease rates on existing rigs it chartered from operators including Oro Negro and Seadrill Ltd in the Gulf of Mexico.

Investors allowed Oro Negro to push back certain obligations to the end of September, while also giving it until then to comply with a minimum asset coverage ratio of 120 per cent, according to a statement from Nordic Trustee ASA. The approval came after creditors opposed some company requests last month, including a plan to pay the bond coupon in kind.

Oro Negro's 11 per cent 2015 notes have dropped to 75.38 cents on the dollar after being sold at 97 cents last November, according to Bloomberg-compiled prices.

The rig operator in April hired advisers to find "strategic alternatives" for the business whose investors included Mexican private equity firm Axis Group, Temasek and US private equity firm Ares Management, according to data on its website.

BLOOMBERG