Moody’s drops Expro CFR to Caa1, loans to B2

Moody's Investors Service said it downgraded Expro Holdings U.K. 3 Ltd.'s corporate family rating to Caa1 from B3 and probability of default rating to Caa1-PD from B3-PD.

Concurrently, the agency downgraded the rating on Expro FinServices Sarl's guaranteed senior secured bank credit facilities consisting of a roughly $1.3 billion term loan and $250 million revolving credit facility to B2 from B1.

The outlook is negative.

Moody’s said the action reflects its view that the current leverage is high relative to market conditions, with an untenable capital structure if current conditions persist.

While the medium- to long-term market fundamentals for Expro's products and services remain favorable, the company's operating performance will continue to be affected by cuts in exploration and appraisal activity by oil companies due to the low oil price environment, the agency said. Furthermore, there is, at this stage, limited visibility around the timing of a potential recovery or stabilization of market conditions.

The Moody's-adjusted leverage stood at 7.5 times as of Sept. 30 but could increase to above 9 times over the next 12 to 18 months.

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