S&P lifts FTS International loan to B

Standard & Poor's said it affirmed its B corporate credit rating on FTS International Services LLC (FTS). The outlook is negative.

At the same time, the agency said it raised the issue-level rating on the term loan held at parent company FTS International Inc. (FTI) to B from B- on the proposed debt reduction plan. The recovery rating on this loan is 4.

The agency said it also affirmed the BB- issue-level rating on the company's existing $550 million senior notes due 2018. The recovery rating on these notes is 1, indicating an expectation for very high recovery in the event of a payment default.

According to S&P, the parent company announced that it is planning to raise $350 million through an offering of convertible preferred stock to its existing equity holders. The company will use the proceeds from the offering to pay down $200 million of the $1.38 billion term loan held at the parent company and $150 million of the $550 million senior notes due 2018 held at the subsidiary.

"The ratings on FTS reflect our view of the company's 'weak' business risk profile, 'highly leveraged' financial risk profile and 'adequate' liquidity," said S&P credit analyst Carin Dehne-Kiley in a news release.

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