Moody's rates Gulf Offshore notes B3, Caa3

Moody's Investors Service said it assigned a Caa2 corporate family rating and a Caa3 probability of default rating to Gulf Offshore Logistics Holdings LLC. Moody's also assigned a B3 rating to the proposed $75 million of second-lien floating-rate notes and a Caa3 rating to the proposed $35 million of third-lien term B notes.

The outlook is positive as the ratings could improve in the short term if the company is successful in arranging a revolving credit facility to provide additional liquidity support for the company's daily operations.

The ratings consider the very small asset base with industry concentration, high leverage, weak liquidity and limited management depth, the agency said. Although a majority of the company's fleet is modern and well-equipped, the company is vulnerable due to its limited scale of operations in a highly cyclical industry with a heavy reliance on drilling activity in the Gulf of Mexico.

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