Moody’s changes Tullow Oil to positive

Moody's Investors Service said it affirmed Tullow Oil plc’s B2 corporate family rating, B2-PD probability of default rating and the Caa1 ratings on its $650 million 2020 and $650 million 2022 senior unsecured global notes.

The outlook was changed to positive from negative.

Moody’s said the outlook change reflects the successful rights issue raising net proceeds of $724 million, which will allow the company to reduce debt.

The agency expects Tullow's adjusted debt/EBITDA to fall to around 4.3 times in 2017 after peaking at 5.5 times in 2016. This should provide the company with greater financial and operational flexibility to grow the business and consider the acceleration of investment in projects and selective growth opportunities.

The transaction will also improve the company's liquidity and give it more time to refinance its debt maturities in 2018, materially reducing the need to draw debt to fund repayments, Moody’s explained.

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