S&P's Nabors ratings unaffected

Standard & Poor's said that Nabors Industries Inc.'s (A-/stable/--) announcement that it has redeemed 93% of its zero-coupon senior convertible notes due 2021 does not affect the rating or outlook on the company.

Nabors used cash on hand to redeem $1.117 billion in principal amount of the convertible debentures for a total redemption price of $769.8 million, the agency said. Pro forma for the redemption, Nabors' cash balance will decline from $1.42 billion to a still adequate level of $650 million, and the company's financial leverage will improve to a conservative 20% total debt to total capital from 35% as of Dec. 31 .

Nonetheless, S&P said it will continue to closely monitor Nabors' ability to prudently fund its significant $1.5 billion capital expenditure plans in 2006, primarily through internal cash flow from favorable market fundamentals and cash on hand, while also maintaining its adequate financial profile for the ratings.

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