Moody’s raises KCA Deutag, facilities, notes

Moody's Investors Service said it upgraded KCA Deutag Alpha Ltd.’s corporate family rating to B3 from Caa1 and probability of default rating to B3-PD from Caa1-PD.

Concurrently, the agency upgraded the rating on its senior secured term facilities, which includes the term loan B upsized to $415 million and revolving credit facility, to B3 from Caa1.

Moody's also upgraded the rating of the $375 million senior secured notes due 2021 and $535 million senior secured notes due 2022, both issued by KCA Deutag UK Finance plc, to B3 from Caa1.

Finally, the agency assigned B3 rating to the new $400 million senior secured notes due 2023 to be issued by KCA Deutag UK.

The outlook is stable. This concludes the review initiated on March 13.

“The upgrade of the rating reflects the resilience of the Moody's adjusted EBITDA margin for the company over the last two years to around 20% despite the significant downturn in the oilfield services sector and Moody's expectations that the recent improvement in the oil price will result in additional capital expenditures from oil companies, the agency said in a news release.

The upgrade also reflects Moody's view that the acquisition of Dalma Energy LLC (Dalma) will strengthen KCA business profile with increased land drilling operations in jurisdictions less vulnerable to oil price fluctuations. The acquisition will allow KCA to become a prominent player in the Middle East with greater access to the Omani and Saudi Arabian markets.”

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