Moody’s cuts KCA Deutag’s rating, may cut again

NEW YORK, Aug 13 (BestGrowthStock) – Moody’s Investors Service on
Friday cut its rating on Turbo Beta Plc, the indirect parent of
KCA Deutag Drilling Group Ltd, citing a postponed high-yield
debt offering.

The downgrade also reflects increased risk that the group’s
capital structure will have to be restructured, Moody’s said in
a statement. If the company buys back debt at below par prices,
the restructuring may be viewed as a default, the rating agency

Moody’s cut Turbo Beta Plc’s rating by one notch to Caa1,
seven steps below investment grade, from B3.

“Ratings could see further downward pressure in the coming
months if negotiations with senior and mezzanine lenders
regarding a covenant restructuring are unsuccessful or if those
result in a distressed exchange,” Moody’s said.

KCA Deutag’s owner Abbot Group [TRBTAG.UL], a UK-based oil
industry services company, said on Monday that its proposed
$500 million bond sale was pulled due to market conditions. It
had planned to use proceeds, along with an equity injection, to
help take out so-called mezzanine debt, allowing it to amend
senior debt covenants. For details click on [ID:nLDE6781G1]

In reviewing the rating for another possible downgrade,
Moody’s said it will focus on potential support from
shareholders and the outcome of lender negotiations.
(Reporting by Dena Aubin; Editing by Dan Grebler)

Moody’s cuts KCA Deutag’s rating, may cut again