S&P rates Geophysical notes B

S&P said it assigned a preliminary B long-term issuer credit rating to Geophysical Substrata Ltd.

The outlook is stable.

The agency also said it assigned a preliminary B long-term issue rating to the company's senior unsecured notes under its proposed $400 million medium-term note program.

The preliminary rating reflects Geophysical's small scale, limited market share and single weak customer in the oilfield services business, S&P said.

The company's sizable related-party advances and distributions in the past weigh on its credit profile, the agency said.

Tempering these weaknesses are the company's steady operating cash flows, revenue diversity from two uncorrelated business segments and margins that are better than the industry average, S&P said.

The preliminary rating is based on an expectation that Geophysical will raise debt to fund its planned capital expenditure at SDP Services and fully refinance the long-term debt outstanding at iEnergizer, the agency said.

The small scale of both its subsidiaries constrains Geophysical's overall scale, S&P added.

The company has limited market share in the highly competitive BPO services industry in India, the agency also noted.

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