Diamond Offshore (DO, Financial), an offshore drilling contractor with offices around the globe, is a leading operator in a sector beset by latent overcapacity and sluggish growth. Diamond’s credit rating was downgraded in the quarter largely due to expectations of lower contracting activity among the major offshore explorers. Despite continued weakness in the sector, Diamond is consuming marginal amounts of cash and has sufficient liquidity over the coming years to manage through trough conditions.
From First Eagle Investment (Trades, Portfolio)'s High Yield Fund third-quarter 2019 shareholder letter.
