Moody's: Ulterra loan Caa1

Moody's Investors Service said it assigned a Caa1 corporate family rating to Ulterra Drilling Technologies, LP and a Caa1 rating to its proposed senior secured credit facilities consisting of a $90 million term loan and a $15 million revolving credit facility.

The outlook is stable.

The majority of the proceeds from the proposed term loan will be used to repay all of the company's currently outstanding debt.

The ratings reflect the company's small scale, single product line and very small market share while competing against large diversified services companies, the agency said.

The ratings also consider Ulterra's exposure to the level of oil and gas drilling activity in North American and Canada and the highly competitive nature of the drill bit business, the agency added.

The ratings are supported by the current positive trend in drilling activity, Ulterra's track record of market share growth, diversified customer base and geographic diversification between the United States and Canada, Moody's said.

At March 31, the adjusted debt-to-EBITDA ratio was 3.4 times.

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