S&P rates KLX Energy notes B

S&P said it assigned its B issuer credit rating to KLX Energy Services Holdings Inc. The outlook is stable.

At the same time, S&P assigned a B issue-level rating to the company's proposed $250 million seven-year senior secured notes due in 2025. The recovery rating is 3, indicating an expectation of meaningful (50%-70%; rounded estimate: 65%) recovery in the event of a payment default.

“The B issuer credit rating on KLX Energy reflects the company's relatively small scale and scope, largely commoditized products and services, and exposure to the highly cyclical oilfield services sector,” S&P said in a news release.

“This is partly offset by the company's good geographic footprint across all major U.S. basins and its broad and diversified customer base.”

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