- Atwood Oceanics (ATW -1.6%) is lower again and has shed 12% since its Q4 earnings report, and Evercore ISI’s James West says ATW needs a “Belichick ‘capital structure playbook’ to pull off the balance sheet comeback."
- Noting that ATW's net debt is just shy of $1B, Evercore says the company remains committed to calling additional plays from its "capital structure playbook" to reduce and/or stagger debt maturities in order to reduce refinancing risk, but with a ~$700M backlog, the firm sees liquidity as a continued concern considering the revolver maturing in 2019 and the bonds maturing in 2020.
- Evercore says crude oil price improvement and recent contract wins provide some visibility in what could be the home stretch of the offshore drilling downturn, but the firm sees dilution risk associated with another possible equity raise as ATW already is highly leveraged.