Moody's introduces new ratings

Moody's Investors Service has introduced two new ratings: probability-of-default ratings and loss-given-default ratings.

The agency's current long-term credit ratings are opinions about expected credit loss that incorporate both the likelihood of default and the expected loss in the event of default. The loss-given-default rating methodology will disaggregate these two key assessments in long-term ratings. The agency said the methodology will also enhance the consistency in its notching practices across industries and will improve the transparency and accuracy of its ratings, as Moody's research shows that credit losses on bank loans have tended to be lower than those for similarly rated bonds.

Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha-numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations.

Loss-given-default assessments (or LGDs) are assigned to individual rated debt issues - loans, bonds and preferred stock - and express Moody's opinion of expected loss as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0%-9%) to LGD6 (loss anticipated to be 90%-100%).

Below is a list of the rating actions for Moody's rated companies, sorted by industry. The rating immediately after the company name denotes the corporate family rating and the percentages next to the LGDs represent the expected loss-given-default rates.

North American oilfield service, refining and marketing

Bristow Group Inc., Ba2; probability-of-default rating: Ba2; notes, Ba2, LGD4, 59%.

CHC Helicopter Corp., Ba3; probability-of-default rating: Ba3; notes, upgraded to B1 from B2, LGD4, 67%.

Frontier Oil Corp., Ba3; probability-of-default rating: Ba3; notes, B1, LGD4, 67%; senior unsecured shelf, prospective B1, LGD4, 67%; subordinated and preferred shelves, prospective B2, LGD6, 97%.

Giant Industries Inc., B1; probability-of-default rating: B1; notes, upgraded to B2 from B3, LGD4, 60%.

Grant Prideco, Inc., Ba1; probability-of-default rating: Ba1; notes, Ba1, LGD4, 55%.

GulfMark Offshore, Inc., Ba3; probability-of-default rating: Ba3; notes, B1, LGD5, 78%.

Hanover Compressor Co., B1; probability-of-default rating: B1; senior unsecured notes, upgraded to B2 from B3, LGD4, 59%; convertible notes, B3, LGD5, 89%; convertible preferred securities, upgraded to B3 from Caa1, LGD6, 96%. Hanover Equipment Trust 2001A, notes, upgraded to Ba3 from B3, LGD3, 30%. Hanover Equipment Trust 2001B, notes, upgraded to Ba3 from B2, LGD3, 30%.

Hornbeck Offshore Services, Inc., Ba3; probability-of-default rating: Ba3; notes, Ba3, LGD4, 58%.

McDermott International Inc., B1; probability-of-default rating: B1; multiple seniority shelf, prospective B3, LGD6, 97%. McDermott Inc., bonds, downgraded to B3 from B2, LGD6, 94%.

North American Energy Partners, Inc., B3; probability-of-default rating: B3; senior secured notes, upgraded to B1 from B3, LGD2, 29%; senior unsecured notes, Caa1, LGD5, 72%.

Parker Drilling Co., B2; probability-of-default rating: B2; notes, B2, LGD4, 55%.

PHI, Inc., B1; probability-of-default rating: B1; notes, downgraded to B2 from B1, LGD4, 59%.

Seacor Holdings Inc., Ba1; probability-of-default rating: Ba1; notes, Ba1, LGD4, 57%; senior unsecured shelf, prospective Ba1, LGD4, 57%; subordinated and preferred shelf, prospective Ba2, LGD6, 97%.

Seabulk International Inc., notes, Ba1, LGD4, 57%.

Secunda International Ltd., B2; probability-of-default rating: B2; notes, B2, LGD3, 48%.

Seitel, Inc., B2; probability-of-default rating: B2; notes, B3, LGD4, 59%.

SESI, LLC, Ba3; probability-of-default rating: Ba3; notes, downgraded to B1 from Ba3, LGD4, 63%.

Stewart & Stevenson LLC, B2; probability-of-default rating: B2; notes, B3, LGD5, 74%.

United Refining Co., B3; probability-of-default rating: B3; notes, downgraded to Caa1 from B3, LGD4, 61%.

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