Moody's ups Basic Energy, rates loan Ba3

Moody's Investors Service said it raised the corporate family rating of Basic Energy Services Inc. to Ba3 from B and the company's $220 million senior secured credit facilities to Ba3 from B1,

Moody's also assigned a Ba3 rating to the company's new $215 million of senior secured credit facilities, which includes a $125 million five-year revolving credit facility and a $90 million six-year secured term loan.

The outlook is stable.

The ratings upgrade reflects the company's continued improvement in its credit metrics, the improved scale and diversification of its products and services, the favorable outlook for the oilfield services sector, the company's focus on the increasingly services-intensive North American basins. A significant component of the company's business that is focused on the less-volatile well services area and the management team's long sector experience, the agency said.

The ratings remained restrained by the inherent volatility and cyclicality of the oilfield services business, event risk tied to the company's acquisition appetite, the company's singular exposure to the very mature onshore U.S. market which is in long-term decline, its still relatively small scale compared to the company's largest competitors and a meaningful part of the earnings and cash flows derived from new drilling activity which remains commodity price and cost sensitive to the E&P companies.

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