Moody's rates Newalta debt B1

Moody's Investors Service said it assigned a B1 (LGD5, 72%) rating to Newalta Corp.'s C$150 million of series 3 senior debentures. The company's existing Ba3 corporate family rating, Ba3-PD probability of default rating, B1 (LGD5, 72%) senior note ratings, SGL-3 speculative grade liquidity rating and stable outlook remain unchanged.

Proceeds will be used to fully redeem Newalta's C$125 million series 1 senior debentures and reduce its revolver borrowings by about C$20 million.

The agency said Newalta's Ba3 corporate family rating reflects its modest size within the broader oilfield services and waste management industries and susceptibility of cash flows to volatile oil and gas and lead prices.

However, the rating also considers the company's breadth of operations and diversity within its market segment, regulatory permits and technological expertise that provide competitive advantages, its long-standing customer base and favorable leverage of about 3 times, Moody's said.

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