S&P upgrades Expro to CCC+

S&P said it raised its long-term corporate credit rating on Expro Holdings U.K. 3 Ltd. to CCC+ from SD (selective default).

The agency also affirmed its B- issue ratings on Expro's $175 million revolving credit facility and $1.3 billion term loan. The recovery rating is unchanged at 2, indicating an expectation of recovery in the lower half of the 70%-90% range.

At the same time, S&P withdrew the issue rating on Expro's mezzanine facility after it converted the vast majority of its debt to equity.

The upgrade follows Expro's completion of the exchange of its $780 million mezzanine facility due 2018 for equity.

S&P said the ratings reflect its view that despite the material debt reduction, Expro's capital structure remains unsustainable, with adjusted debt to EBITDA above 8 times in 2017. Moreover, under the agency’s working assumption of no material rebound in deep-water-focused oil and gas industry conditions, Expro will generate negative to break-even free operating cash flows in the coming years.

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