Moody's changes Compagnie Generale de Geophysique view to stable

Moody's Investors Services said it affirmed the Ba2 corporate family rating of Compagnie Generale de Geophysique and the Ba3 rating on its $165 million 7½% senior notes due 2015.

The outlook was changed to stable from negative.

The outlook revision follows the recent completion of a share capital increase that has generated about €200 million of net proceeds to the company, which will be used to repay 63% of the $375 million bridge loan facility raised to fund the acquisition of Exploration Resources ASA in August.

The refinancing of the outstanding bridge loan ($135 million) is expected to take place early next year through the issuance of a new high-yield bond, the agency said.

The ratings remain constrained by the high cyclicality in the seismic industry, the poor performance of the land seismic business and the risk of over-capacity in the marine seismic sector during cyclical downturns.

At the same time, Moody's noted the current rebound in demand in the seismic services sector on the back of high oil prices, which has resulted in a record backlog for the company of over $750 million at Nov. 1.

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