Fitch lowers Anton Oilfield

Fitch Ratings said it downgraded Anton Oilfield Services Group’s long-term issuer default rating by two notches to B- from B+.

Fitch also said it lowered Anton’s recovery rating to RR5 from RR4 and the senior unsecured rating on the company’s $250 million 7½% bonds maturing November 2018 to CCC from B+.

All of the ratings also were placed on Rating Watch negative.

The downgrades reflect Anton’s tighter liquidity and elevated refinancing risk, which are evident in its results for the first six months of 2015, Fitch said.

Anton’s credit risk has increased with working capital needs that continue to be high despite a drop in revenue from 2014, along with a material reduction in cash balances, the agency said.

While Anton has managed to expand its order book in the first half of 2015, much of that growth has been from overseas, including Iraq and Ethiopia, which come with higher geopolitical risks despite potentially wider margins, Fitch said.

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