Moody's cuts some Allis-Chalmers ratings

Moody's Investors Service said it confirmed Allis-Chalmers Energy Inc.'s B3 corporate family rating, changed its probability-of-default rating to B3/LD from B3, and downgraded its $255 million 9% senior notes due 2014 to Caa3 (LGD3, 35%) from Caa1 (LGD4, 61%) and its $250 million 8.5% senior notes due 2017 to Ca (LGD3, 40%) from Caa1 (LGD4, 61%).

The outlook is stable. The action ends the review for downgrade begun on May 29.

The action reflects the company's completion of its cash tender offer on its $255 million 9% senior notes due 2014 and $250 million 8½% senior notes due 2017 at a significant discount to par, which Moody's said is a distressed exchange.

Moody's said the B3 corporate family rating incorporates the completion of the tender offer.

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