Moody's cuts Nabors

Moody's Investors Service said it downgraded the senior unsecured ratings of Nabors Industries Inc. to Baa1 from A3, adding that this concludes its ratings review initiated on July 17, following the company's announcement of a $750 million senior unsecured notes offering.

The outlook is stable.

"Moody's lowered Nabors' ratings to Baa1 to reflect the company's more aggressive financial policies relative to its peers," commented Pete Speer, Moody's vice-president.

"The company's leading market position and high quality drilling fleet are offset by its higher financial leverage."

Although Nabors ultimately reduced its senior unsecured notes issuance to $400 million due to pricing considerations, the agency said that this debt issuance in anticipation of increasing demand for newbuild rigs and other capital investments will continue the company's trend of increasing debt during this upcycle.

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