Moody’s applies B3 to SESI notes

Moody's Investors Service said it assigned a B3 rating to SESI, LLC's (wholly owned subsidiary of Superior Energy Services, Inc.) proposed offering of $500 million senior unsecured notes due 2024.

SESI's other ratings and stable outlook were unchanged.

Net proceeds will be used to help redeem SESI's $500 million 6 3/8% senior notes due 2019.

"This transaction removes the near-term refinancing risk that the company was facing, and will help SESI during negotiations with its revolver lending group for maturity extension, which is set to expire in February 2019," Moody's senior analyst Sajjad Alam said in a news release.

The proposed notes will rank equally in right of payment with SESI's existing senior unsecured notes and will have the same subsidiary guarantee package.

The proposed notes are rated B3, one notch below the B2 corporate family rating given their subordinated claim to SESI's assets relative to the company's $300 million senior secured revolving credit facility, Moody’s explained.

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