Moody's rates Helmerich & Payne notes Baa1

Moody's Investors Service said it assigned a Baa1 rating to Helmerich & Payne Inc.'s proposed $500 million senior unsecured notes due 2025.

Moody's also said it affirmed the Baa1 rating of Helmerich & Payne Intl. Drilling Co.'s existing $500 million 4.65% notes due 2025.

The outlook is stable on both companies.

The proposed bond offering will be used to repay the outstanding notes at Helmerich & Payne Intl. Drilling through a bond exchange offer, which was initiated concurrently with Helmerich & Payne's note offering and is expected to close in December 2018, the agency said.

The company is attempting to simplify its corporate structure by moving its existing debt, including the revolving credit facility, to the publicly traded parent holding company, Moody's explained.

The company has already placed a larger $750 million revolving credit facility at Helmerich & Payne and terminated its prior $300 million revolver at Helmerich & Payne Intl. Drilling, the agency said.

The new notes will have substantially similar terms and conditions as the existing notes, Moody's said.

The new notes will rank pari passu with the current notes and revolving credit facility, the agency said.

The ratings reflect its strong balance sheet, underpinned by a low debt level and significant cash balance, Moody's said.

The ratings also consider the company's leading and diversified market position in the United States land-drilling markets, the agency said, and management's long track record of prudent financial policies.

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