Superior Energy Services Gets Ba3 Rating

  • 29 Apr 2001
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Moody's Investors Service assigned a Ba3 rating to Superior Energy Services' $50 million senior secured term loan and its $70 million senior secured revolving credit based on the company's aggressive growth strategy. According to Helen Cavelli, senior analyst and v.p., it's a strategy the company continues to pursue. "They were very small five years ago and have grown very rapidly through acquisitions," she said.

The ratings also considers the asset intensity and cyclical nature of the business. Superior, based in Louisiana, provides specialized oilfield services and equipment to major and independent oil companies, primarily in the Gulf of Mexico/U.S. Gulf Coast region. "They have a business that owns assets with boats that they need to carry and maintain; the business is tied to oil and gas prices. When the prices went down in 1998, customers cut back on spending activity," Cavelli said.

The company's centralized operations support the rating. Moody's notes the company has long-standing customer relationships with major oil and gas companies. It is the second largest provider of rental tools and has the largest lift boat fleet serving the region. "It's built a very good position in the services it provides and is focused on the Gulf region," explained Cavelli. The outlook is stable, although sensitive to reducing leverage ahead of the next cyclical downturn in the oil services sector. The ratings and outlook anticipate reductions in debt from cash flow, which is benefiting from favorable near term sector fundamentals and balanced funding of acquisitions.

  • 29 Apr 2001

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4 Barclays 4,040 11 6.87
5 Lloyds Bank 3,615 14 6.15

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