S&P gives Nabors notes B-

S&P said it gave B- issue and 2 recovery ratings to Nabors Industries Inc.’s planned senior-priority guaranteed notes due 2027. The 2 recovery rating indicates an expectation for substantial recovery (70%-90%; rounded estimate: 70%) of principal in default.

Nabors Industries Ltd., the issuer’s parent, will use the proceeds to reduce the borrowings on its credit facility and for general corporate purposes. Concurrently, S&P placed all its ratings for Nabors on CreditWatch with positive implications.

“The CreditWatch placement reflects the elevated likelihood that we will upgrade the company following its successful reduction of the outstanding borrowings on its credit facility which should help Nabors in negotiations to amend and extend its credit facility. We also expect Nabors will continue to reduce its total outstanding debt and improve its maturity profile, including by repaying a portion of its notes that mature in 2023. This offering demonstrates the company's ability to access the capital markets,” the agency said in a press release.

S&P said it aims to resolve the CreditWatch over the next few weeks depending on the progress of the negotiations surrounding the company's credit facility and future debt retirement plans. It plans to raise Nabors’ rating a notch to B- and the senior-priority guaranteed notes to B from B-, the issue-level rating on its unsecured guaranteed notes by one notch to CCC, and the issue-level rating on its unsecured debt by one notch to CCC.

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