S&P puts ADES on watch

S&P said it placed ADES International Holding plc’s B+ issuer rating on CreditWatch with negative implications, and withdrew the issue rating on its senior secured bonds that were redeemed early.

ADES’s $300 million debt-funded acquisition of four Noble rigs in Saudi Arabia and the refinancing of its senior secured bonds and syndicated facility through a $425 million bridge loan in June could pressure liquidity if the company fails to refinance by year-end, the agency said. The $300 million facility is due next August and the $425 million facility next June.

“The CreditWatch placements reflects near-term refinancing risk for ADES. We see a risk of a material deficit in ADES's liquidity profile if its short-term obligations are not met, for instance, if the company fails to refinance its two recently placed bridge facilities this year,” S&P said in a press release.

“Failure to refinance would translate into a weaker liquidity assessment and a rating downgrade by two or more notches. We understand the company is working on several options, and that refinancing should take place over the next three months,” the agency said.

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