A familiar issue is plaguing oil services exchange traded funds, such as the Market Vectors Oil Service ETF (NYSEArca: OIH), again Tuesday: Negative speculation about the ability of some of the industry’s constituents to continue paying dividends at a time when oil prices languish.

OIH, the largest oil services ETF, is off 2.7% today after Credit Suisse lowered its rating on Transocean (NYSE: RIG) to underperform from neutral . The bank added that Transocean must consider paring its dividend.

“Transocean currently pays $1.1B in dividends annually (16% dividend yield) – we expect a cut. While the prudent move would be to suspend the dividend we could see a $0.40 annual dividend or $1B in cash flow savings. Higher up the tree is the cancellation or long-term delay of two newbuild drillships delivering in 2017/18 – that is another $1.1B in cash flow savings. We just saved Transocean ~$4B in cash through 2018,” said Credit Suisse in an excerpt of a note posted by Barron’s.

This issue is not new for OIH and rival oil services ETFs. Talk of a potential dividend cut or suspension by Transocean dates back until at least October when rising credit default swaps for the company and several of its rivals implied dividend cuts were coming for the oil services industry. [Dividend Speculation a Problem for Oil Services ETFs]

Negative dividend speculation in the oil services arena was confirmed in November when SeaDrill (NYSE: SDRL) completely cut its $1 per share quarterly dividend, sending its shares and those of OIH tumbling. Transocean currently yields 16.2%. Seadrill and Transocean combine for 7.6% of OIH’s weight.

Analysts have also highlighted other OIH constituents, including Ensco (NYSE: ESV) and Noble (NYSE: NE), as potential deliverers of negative news. Although dividend cuts or suspensions may be prudent for these companies and others, they may be reluctant to pare their payouts after seeing the treatment given to Seadrill the day that company suspended its dividend. Seadrill fell more than 20% on that news. [Dividend Conundrum for Oil Services ETFs]

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