Moody’s might lift Ausdrill

Moody's Investors Service said it placed on review for upgrade the Ba3 corporate family rating of Ausdrill Ltd.

At the same time, the agency placed the Ba3 rating on the senior unsecured notes issued by Ausdrill Finance Pty. Ltd. on review for upgrade.

Moody's said the review follows Ausdrill’s announcement that it has reached an agreement to acquire 100% of the share capital of Barminco Holdings Pty Ltd. for a total consideration of around A$697 million.

Barminco's $350 million senior secured notes due May 2022 are expected to remain in place following the completion of the proposed transaction.

As part of the announcement, Ausdrill has also indicated that it will undertake a fully underwritten equity raising of A$250 million. The company will use the proceeds from the equity raising, combined with around A$106 million of availability under its revolving credit facilities, to repay its $300 million senior unsecured notes.

The agency said its review will focus on the progress and completion of the proposed transaction, completion of the repayment of Ausdrill's $300 million senior unsecured bond, and the ultimate capital structure of the combined group following a successful transaction.

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