S&P lifts Key Energy

Standard & Poor's said it raised the corporate credit rating on Key Energy Services Inc. to BB from BB- and its senior unsecured notes to BB from BB-.

The outlook is stable.

"The upgrade reflects Key's relatively modest financial leverage and its ability to control capital spending heading into worsening market conditions in 2009," S&P analyst Paul Harvey said in a statement.

The rating reflects the highly volatile nature of the well-servicing industry, limited business diversity and an aggressive growth strategy based on acquisitions, the agency said.

These weaknesses are buffered by relatively strong financial measures that should help support Key in a protracted downturn, a greater focus on the stable crude oil well maintenance business, low capital expenditures and strong market share position in the workover markets, the agency noted.

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