Moody's rates PGS loans B2, Caa2

Moody's Investors Service said it assigned a B2 rating to PGS ASA's senior secured $525 million first-lien term loan due in 2024 and $250 million revolving credit facility due in 2023.

The agency also assigned a Caa2 rating to the $150 million senior secured second-lien bond due 2025, which PGS proposes to raise with PGS Finance, Inc. as a co-borrower.

Moody's also said it affirmed the company's B3 corporate family rating and B3-PD probability of default rating and revised the outlook to positive from stable.

The proceeds from this debt issuance will be used to fully refinance its capital structure, including the $212 million senior notes due 2020 and outstanding $380 million term loan B due 2021, as well as partially repay the $235 million outstanding under the revolving credit facility at the end of March 2019, the agency said.

The ratings for the outstanding $380 million term loan B due 2021 and $400 million revolver due in 2020 are unchanged and are expected to be withdrawn upon completion.

The outlook revision reflects an expectation that PGS's operating profitability and cash flow will benefit from a gradual recovery in the contract market, Moody's said, as oil companies start raising exploration and production spending following several years of under-investment.

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