Moody's lowers Veritas DGC facility to Ba3

Moody's Investors Service said it downgraded the ratings of Veritas DGC Inc. and left the outlook negative.

Ratings lowered include the company's $55 million senior secured revolver maturing 2006 and $155 million senior secured term loan maturing 2007, both to Ba3 from Ba2, and the company's $40 million second priority term loan maturing 2008 to B1 from Ba3. The senior unsecured issuer rating was cut to B2 from B1.

Moody's said the downgrade reflects ongoing weakness in the seismic sector with Moody's belief that there is no near-term visible catalyst for sustainable improvement despite upcycle commodity prices and record cash flows by exploration and production companies; sector over-capacity and lack of pricing discipline among competitors that continues to pressure pricing and margins; and significant investment requirements to remain competitive that may pressure Veritas' liquidity over the intermediate term.

The agency noted that the ratings are supported by Veritas' solid market position as one of the four major international providers of land and seismic services and its financial discipline that recognizes the cyclical, technological and investment risks of the business.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.