Moody's rates Allis-Chalmers note add-on B3

Moody's Investors Service said it assigned a B3 rating to the proposed $80 million senior unsecured add-on notes to be issued by Allis-Chalmers Energy, Inc.

At the same time, Moody's affirmed with a stable outlook Allis' B3 corporate family rating, B3 senior unsecured note rating and SGL-2 speculative grade liquidity rating.

Proceeds from the notes will be used to partially fund the cash portion of Allis' pending acquisition of DLS Drilling Logistics and Services Corp., as well as the repayment of $4 million in debt, about $5 million in fees and expenses and general corporate purposes.

The ratings affirmation reflects the use of common equity to fund a meaningful portion of the DLS acquisition, DLS's long operating history and strong market position in Argentina, the maintenance of key DLS management and improving dayrates and utilization levels in Argentina, which help to mitigate the associated political, business, performance and integration risks of the acquisition.

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