Short-term credit risk is overblown Given that Seadrill's creditors have recently said they will defer loan installment payments until the industry recovers, I think it's likely that Seadrill's debt covenants will be renegotiated to allow Seadrill to continue operating -- and bailing out North Atlantic's debt -- without breaching its covenants. Even Citi's analyst agree that a short-term debt covenant waiver is likely, with their concern being for a longer-term debt covenant breach should the industry not recover within the next few years. That is very possible given that UDW day rates are likely to keep falling, given that another 55 rigs are expected to be delivered in 2015, and already 25% of UDW rigs are without work.In fact, Seadrill's CFO recently said that UDW day rates may drop below $400,000, and not recover to that level until 2017.