S&P rates Ausdrill notes BB

S&P said it assigned a BB rating to the proposed $500 million seven-year senior unsecured 144A notes issued by Ausdrill Finance Pty Ltd., the financing arm of Ausdrill Ltd.

S&P said it assigned the notes a recovery rating of 4, indicating 30% to 50% expected default recovery.

The proceeds will be used to refinance Barminco Finance Pty Ltd.'s $350 million secured notes due in 2022 and repay A$200 million of Ausdrill's A$300 million revolving credit facility.

The BB long-term issuer credit rating on Ausdrill is unchanged and the outlook is stable.

As part of the recapitalization, the group's security structure would be consolidated, S&P said.

The revised capital structure will provide Ausdrill with long-dated debt, the agency said.

The proposed transaction is viewed as credit neutral, S&P explained.

The ratings reflect Ausdrill's increased scale and geographic diversity after its Barminco acquisition last year, as well a view of the company's ability to sustain credit metrics in line with the BB rating level, even under a moderate stress scenario, the agency said.

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