S&P trims KCA Deutag Alpha to CCC+

S&P said it lowered its long-term corporate credit rating on KCA Deutag Alpha Ltd. to CCC+ from B-. The outlook is stable.

At the same time, S&P lowered to CCC+ from B- the issue rating on the company’s $375 million term loan B maturing 2020, $375 million senior secured notes due 2021, $500 million senior secured notes due 2018 and revolving credit facilities totaling $250 million maturing in 2019, including $175 million in cash and $75 million in the form of guarantees. The recovery rating on these instruments is unchanged at 3, reflecting an expectation of recovery in the lower half of the 50%-70% range in the event of a payment default.

S&P said the downgrade reflects KCA Deutag’s high leverage and the risk S&P sees of further EBITDA deterioration in 2016-2017, owing to the current weak conditions in oilfield services.

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