Moody's assigns Key Energy Ba3, notes B1

Moody's Investors Service said it assigned Key Energy Services a corporate family rating of Ba3.

Simultaneously, per Moody's loss given default methodology, Key Energy was assigned a Ba3 probability of default rating and the company's new $400 million of senior unsecured notes were assigned a B1 (LGD 5, 71%) rating.

Moody's said it also assigned Key Energy a speculative-grade liquidity rating of SGL-2.

The outlook is stable.

Proceeds from the $400 million note offering along with borrowings under the $400 million senior secured revolving credit facility, which Moody's does not rate, more than $150 million of cash and short term investments and cash flow from operations will be used to refinance the existing $393 million term loan B, finance share repurchases and fund recent acquisitions including the $145 million Moncla acquisition, the agency said.

Moody's added that the assignment of the Ba3 corporate family rating reflects Key Energy's well-diversified US regional profile and its position as the largest well-servicing company in the United States, complemented by its pressure pumping services and fishing and rental services businesses.

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