S&P: Weatherford notes BB-

S&P said it assigned a BB- rating and 3 recovery rating to Weatherford International Ltd.'s proposed $1 billion senior unsecured notes due 2021 and 2023.

Parent company Weatherford International plc (Ireland) and Weatherford International LLC (Delaware) will guarantee the notes, but the notes will not have the benefit of upstream guarantees from Weatherford International plc's operating subsidiaries, the agency said.

The recovery rating of 3 indicates 50% to 70% expected default recovery.

The proceeds will be used to increase the maximum purchase price to $2.1 million $1.1 million from for the company’s previously announced tender offers on various debt issues due between 2017 and 2020.

The company recently issued $1.265 billion of 5 7/8% exchangeable senior notes due 2021 and plans to use proceeds to fund the tender offers.

The ratings on Weatherford's existing debt are unchanged, including the BB- rating and 3 recovery rating on the company’s senior unsecured debt issued by Weatherford International LLC and Weatherford International Ltd.

Also unchanged include the BB+ rating and 1 recovery rating on the senior unsecured guaranteed revolver issued by Weatherford International Ltd., WOFS International Finance GmbH and Weatherford Worldwide Holdings GmbH, along with the BB+ rating and 1 recovery rating on the secured term loan issued by Weatherford International Ltd.

The company’s BB- corporate credit rating reflects its satisfactory business risk profile, highly leveraged financial risk profile and adequate liquidity, S&P said.

Weatherford's market position and product and geographic diversity are considered stronger than its B+ rated peers in the oil and gas industry, the agency added.

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