Fitch acts on Nabors

Fitch Ratings said it downgraded the issuer default ratings for Nabors Industries, Ltd. and Nabors Industries, Inc. to RD from C upon the completion of the company’s exchange of senior unsecured notes for new senior unsecured priority guaranteed notes.

Fitch said it deems the exchange as a distressed debt exchange under its criteria. Following the exchange, Fitch upgraded Nabors’ IDR to CCC+. Also, Fitch downgraded the revolving credit facility to B+/RR1 from BB-/RR1 and assigned a B/RR2 to the new senior unsecured priority guaranteed notes.

Fitch also affirmed the senior unsecured guaranteed notes at B-, revised the recovery rating to RR3 from RR4 and removed the negative ratings watch. The agency also raised the senior unsecured notes to CCC-/RR6 from C/RR6.

“The revised IDR reflects the material reduction in near-term maturities, which should provide sufficient runway to meet debt obligations in the near term. Fitch expects Nabors to be FCF neutral to slightly positive in the near term with the expectation that rig activity will slowly improve over time,” the agency said in a press release.

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