Moody's rates Hilong notes Ba2

Moody's Investors Service said it assigned a first-time Ba2 corporate family rating to Hilong Holding Ltd. and a provisional Ba2 senior rating to its proposed bonds. The outlook is stable.

The company plans to use the proceeds to repay bank borrowings, to expand the capacities of its coating materials and services segment and its oilfield services segment and for general corporate purposes.

The agency said the Ba2 ratings reflect Hilong's strong market positions in its core drill pipes and coating materials businesses in China on the back of its product offerings, technological capabilities and close relationships with oil majors. Hilong is also fairly diversified geographically, Moody's added.

On the other hand, Hilong's ratings are constrained by the small scale of its operations and volatility in its performance owing to the cyclical nature of the drill pipes and oilfield services businesses, the agency said, and the company also faces high customer concentration.

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