Moody's rates Noble Finance II notes B2

Moody's Investors Service said it assigned new ratings to Noble Finance II LLC, including a B1 corporate family rating and a B2 rating to the company's planned $600 million of senior unsecured notes. Moody's also assigned an SGL-1 speculative grade liquidity rating, to indicate the company's very good liquidity. The outlook is stable. Noble is a wholly owned subsidiary of Noble Corp. plc.

The B2 rating reflects the notes’ position behind a proposed $550 million revolver, which will be secured by a first-lien claim on Noble's assets. The notes will be guaranteed on a senior unsecured basis by all of Noble's subsidiaries that are borrowers or guarantors under the revolving credit facility.

Noble's B1 reflects its low financial leverage of about 1x Moody's projected EBITDA for 2023, high-quality offshore rig fleet that has significant collateral value and competitive advantages and $3.9 billion backlog of as of Dec. 31. However, the rating is constrained by significant re-contracting risks owing to the high level of volatility in oil and gas prices, evolving and untested business strategy, financial policy among other factors, the agency said.

The proceeds will be used to redeem all of Noble's outstanding debt totaling roughly $521 million, cover transaction costs and for general corporate purposes.

"This refinancing transaction simplifies Noble's capital structure and adds a substantial liquidity buffer that should support re-contracting and reinvestment efforts in an improving offshore drilling market," said Sajjad Alam, a Moody's vice president, in a press release

"Upon successful closing, the company will have $600 million of balance sheet debt and about $890 million of total liquidity, including a newly established undrawn $550 million senior secured revolving credit facility, " Alam added. The completion of the notes offering is not conditioned upon Noble's planned closing of the new revolver agreement.

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