S&P affirms Frontier Drilling, ups loan, gives new loan CCC

Standard & Poor's said it affirmed its B- corporate credit rating on Frontier Drilling ASA.

At the same time, the agency said it raised its rating on Frontier Drilling's $350 million senior secured credit facilities, after the company's proposed $25 million add-on, to B from B-.

The first-lien facilities now consist of a $60 million revolving credit facility and $290 million term loan B, the agency added, noting that it assigned a CCC issue rating and 6 recovery rating to a proposed $100 million second-lien term loan.

The outlook is stable.

According to S&P, the ratings on Frontier Drilling reflect a highly leveraged financial risk profile, a limited number of currently operating offshore units, rising upgrade project costs and weak credit metrics while these concerns are not fully offset by Frontier Drilling's favorable intermediate-term backlog of contract revenues, successful completion of the Discover upgrade project, consistent operating and cash flow performance from the Seillean and Duchess offshore units over the past year and adequate near-term liquidity.

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