Moody's rates Hercules loans Ba3

Moody's Investors Service said it upgraded Hercules Offshore, Inc.'s corporate family rating to Ba3 from B2 and assigned Ba3 ratings (LGD3, 33%) to the company's upcoming senior secured bank credit facilities.

The secured bank facilities comprise a $900 million term loan B and a $150 million revolving credit facility.

The outlook is stable.

Proceeds from the term loan will be used to repay debt and to fund the cash purchase of Todco. The acquisition is expected to close next month, following shareholder approval. This action concludes a review for possible upgrade initiated on March 19.

The upgrade represents the company's bolstered size, scale and market position following the acquisition of Todco. The ratings also consider that more than 60% of the Todco purchase is being made with equity and the company's modest leverage, along with its plans to slash debt by the end of 2008.

The company's debt-to-EBITDA ratio was about 1.6 times as of March 31, Moody's said, adding that even under a stress-case scenario, the company's debt-to-EBITDA ratio is likely to stay below 4 times.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.