S&P assigns Geokinetics B-, floaters CCC+

Standard & Poor's said it assigned its B- corporate credit rating to Geokinetics Inc.

At the same time, S&P said it assigned its CCC+ rating and 3 recovery rating to Geokinetics' $100 million in second-lien floating rate notes.

Proceeds from the note offering will be used to refinance existing debt raised fund the company's recent acquisition of seismic provider Grant Geophysical Inc. in September, the agency said.

S&P added that the ratings on Geokinetics reflect participation in the historically cyclical land seismic acquisition business, an acquisitive growth strategy and a highly leveraged financial risk profile.

More specifically, the ratings incorporate S&P's concerns regarding cash flow durability through the oil and gas spending cycle despite a favorable near-term industry outlook.

Weaknesses are not sufficiently mitigated by improved geographic scope and operational scale, a currently healthy backlog of data acquisition projects and an experienced management team, the agency said.

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