S&P rates Frontier Drilling, loan B-

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

At the same time, the agency said it assigned its B- rating and 2 bank loan recovery rating to the company's proposed $315 million senior secured credit facility, consisting of a $165 million term loan B, a $100 million delayed draw term loan and a $50 million revolver.

S&P added that the ratings on Frontier Drilling reflect a highly leveraged financial risk profile, a limited number of currently operating offshore units and concerns with regard to successfully executing upgrade projects for two of the company's drillships.

Not quite offsetting concerns are firm contracts in place for the two drillships that will be undergoing upgrades, good revenue visibility for the company's two operating units, a $50 million revolver and $100 million delayed draw term loan to provide liquidity during the upgrade phase and an experienced management team, the agency added.

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