Moody’s rates Basic Energy notes B3

Moody's Investors Service said it assigned ratings to Basic Energy Services, Inc., including a B3 corporate family rating, a B3-PD probability of default rating and a B3 senior secured notes rating.

The agency also assigned an SGL-2 speculative grade liquidity rating.

The outlook is stable.

The proceeds of the $300 million senior secured notes will be used to repay the existing fixed-rate term loan and repay borrowings under the existing ABL facility.

“Basic's rating reflects the company's small scale and the cyclicality of the oilfield services (OFS) sector, offset by the company's reduced leverage and geographic and service offering diversification,” Sreedhar Kona, Moody's senior analyst, said in a news release.

“Although the utilization has improved, the OFS sector continues to remain challenged for increasing margins and the company will need to demonstrate its operational capability, growth strategies and more conservative financial policies post its emergence from bankruptcy.”

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