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S&P changes KLX outlook to stable
S&P said it changed its outlook for KLX Energy Services Holdings Inc. (KLXE) to stable from positive and affirmed its ratings, including the CCC+ senior secured note ratings.
“We continue to monitor refinancing efforts as the company has upcoming maturities in about 18 months. As of December 2023, KLXE had $50 million drawn on its $120 million ABL facility due in September 2025, and its $250 million senior secured notes due in November 2025 remained outstanding,” S&P said in a press release.
Management intends to refinance these in calendar 2024 and the agency said it expects KLXE will tackle these maturities in a timely and favorable manner.
Unrestricted cash of $113 million supports liquidity after KLXE delivered about $65 million free cash flow in 2023 and opted to keep the cash instead of paying down the ABL.
“The stable outlook reflects our expectation for negative free cash flow of about $10 million in 2024 and a recovery to about break-even in 2025 on higher natural gas prices and activity,” the agency said.
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