S&P: Oil States remains on watch due to spin-off

Standard & Poor's said the BB+ corporate credit and other ratings on Oil States International Inc. remain on CreditWatch with negative implications.

The ratings were first placed on CreditWatch in August 2013 and remain on watch due to implications for potential downgrade upon completion of a spin-off of the company's accommodations business into a separate entity, S&P said.

The company believes that it can execute the proposed spin-off through a tax-free distribution to its shareholders by the end of the second quarter of 2014, the agency said.

The accommodations business currently generates about half of the company's EBITDA and separating the operations would have a negative impact on the company's business risk profile given the diminution of business diversity and an evaluation of the company's other segments, S&P said.

Oil States also will be required to refinance its secured credit facilities and will likely redeem or call all of its senior notes in connection with the spin-off, the agency added.

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