Moody's rates Newpark loan B2

Moody's Investors Service said it assigned a B2 rating to Newpark Resources, Inc.'s new $150 million five-year senior secured term loan facility. At the same time, Moody's affirmed Newpark's B1 corporate family rating and B3 senior subordinated note rating.

The outlook remains negative pending the filing of the company's financial statements for the last five fiscal years, as well as for the fiscal quarters within 2004 and 2005.

Moody's said proceeds from the new term loan are being used to refinance Newpark's $125 million 8 5/8% senior subordinated notes and repay other debt.

The company's delay in filing its financial statements has resulted in it violating the financial reporting covenants under both its senior subordinated notes and its bank credit facility. On July 20, the company received a notice of default from more than 25% of the holders of its subordinated notes. The company must cure the default by Aug. 19 or risk having the notes accelerated.

The company has received an extension until Sept. 10 of its financial statement delivery requirements from the lenders under its bank credit facility.

The negative outlook reflects Moody's concern that the time to complete the restatements could be considerable. In addition, with any such investigation, the possibility remains that additional issues and concerns will be identified, which could expand the investigation's original scope.

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