Moody’s gives Precision Drilling notes B3

Moody's Investors Service said it assigned a B3 rating to Precision Drilling Corp.’s proposed $350 million senior unsecured notes.

The majority of the proceeds will be used to tender for Precision's 2019, 2020 and 2021 senior unsecured notes.

Precision's B2 corporate family rating, B2-PD Probability of default rating, speculative-grade liquidity rating of SGL-2 and the B3 ratings on its existing senior unsecured notes are unchanged.

The outlook remains negative.

Moody’s said the B2 corporate family rating reflects expected high leverage and weak coverage in 2017 resulting from low North American land drilling rig utilization severely pressuring spot market margins, together with a rolling off of expiring high margin contracts.

The agency expects little recovery in EBITDA in 2017 from a Moody's expected low 2016 level, which will keep debt to EBITDA above 7 times in 2017 and EBITDA to interest around 2 times.

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