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Moody's downgrades Anton Oilfield
Moody's Investors Service said it downgraded Anton Oilfield Services Group's corporate family and senior bond ratings to Ba3 from Ba2. The outlook remains negative.
"The ratings downgrade reflects Anton's worse-than-expected operating performance for 2014, which has materially increased its debt leverage," Chenyi Lu, a Moody's vice president and senior analyst, said in an agency news release.
"The rating action also considers our expectation that Anton's operations will continue to be negatively affected by the ongoing weakness in oil prices over the next 12 to 18 months."
At the same time, Anton's Ba3 ratings are supported by its leading position in the domestic oil and natural gas services sector in China, diversified revenue base, competitive technical edge in providing key signature services and its strategic alliance with, and technical support from, Schlumberger Ltd. (Aa3/stable), Moody’s said.
On the other hand, Anton's Ba3 ratings are constrained by its small scale and customer concentration, its weak operating cash flow due to its high working capital needs and increasing competition and execution risk from its fast expansion, the agency said.
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