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Moody’s rates Weatherford notes B2
Moody’s Investors Service said it assigned new ratings to Weatherford International Ltd. following its emergence from bankruptcy, including a B1 corporate family rating, a B1-PD probability of default rating, a Ba2 rating on its secured ABL and letters of credit facilities and a B2 rating on the company’s senior unsecured notes. The outlook is stable.
“Weatherford has a more sustainable capital structure and greater financial flexibility after eliminating over $6.2 billion of debt through a pre-packaged Chapter-11 bankruptcy financial restructuring process during 2019," said Sajjad Alam, a Moody’s senior analyst, in a press release. “While we expect U.S. oilfield services industry conditions to remain weak in 2020, Weatherford should have a relatively stable performance given its significantly lower interest burden, reduced overhead costs, a sizeable liquidity cushion and a diversified international market presence.”
Moody’s rated the $2.1 billion senior unsecured notes B2 because of the significant amount of priority-claim secured debt in Weatherford’s capital structure. The $450 million ABL facility and the $195 million LC facility are both secured by a first-lien claim to Weatherford’s assets and they are rated Ba2. The notes and credit facilities have guarantees from Weatherford International plc, Weatherford International, LL, as well as from most material asset owning subsidiaries, the agency said.
A first-lien claim to certain accounts receivable, inventory and rental tools assets and a second-lien claim to other assets, including real assets secure the ABL facility. A first-lien claim to the non-ABL collateral pool and a second-lien claim to ABL collateral secure the LC facility.
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