$175 million of debt affected
Toronto, February 21, 2012 -- Moody's Investors Service placed Flint Energy Services Ltd's (Flint)
B1 Corporate Family Rating (CFR), B1 Probability of Default Rating
(PDR) and B2 senior unsecured rating under review for upgrade following
the announcement that the company has signed a definitive agreement to
be acquired by URS Corporation (URS) (Baa3 stable). The total transaction
value is $1.5 billion including $225 million of debt
and finance leases. Closing of the transaction is subject to the
approval of Flint's shareholders and other customary closing conditions.
"We have put the ratings of Flint on review for an upgrade based on its
announced agreement to be acquired by URS, a company with a much
stronger credit profile", said Terry Marshall, Moody's Senior
Vice President.
On Review for Possible Upgrade:
..Issuer: Flint Energy Services Ltd.
.... Probability of Default Rating,
Placed on Review for Possible Upgrade, currently B1
.... Corporate Family Rating, Placed
on Review for Possible Upgrade, currently B1
....Senior Unsecured Regular Bond/Debenture,
Placed on Review for Possible Upgrade, currently B2
Outlook Actions:
..Issuer: Flint Energy Services Ltd.
....Outlook, Changed To Rating Under
Review From Stable
RATINGS RATIONALE
The review for upgrade will focus on whether URS guarantees, legally
assumes or otherwise contractually supports the C$175 million of
senior unsecured notes, in which case the rating is likely to be
upgraded to the rating of URS Corporation. If Flint's senior
unsecured notes remain outstanding and are not guaranteed or otherwise
supported after the acquisition is completed, the ratings could
still be upgraded as long as sufficient financial information for Flint
is available to monitor the ratings, but not to the level of the
URS Corporation rating. Should the notes be repaid in connection
with the closing of the transaction, Moody's will withdraw all of
the Flint's ratings.
The principal methodology used in rating Flint Energy Services Ltd.
was the Global Oilfield Services Industry Methodology published in December
2009. Other methodologies used include Loss Given Default for Speculative-Grade
Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009. Please see the Credit Policy page
on www.moodys.com for a copy of these methodologies.
Flint Energy Services Ltd. is a Calgary, Alberta-based
provider of products, services and maintenance to the oil and gas
industry.
REGULATORY DISCLOSURES
Although this credit rating has been issued in a non-EU country
which has not been recognized as endorsable at this date, this credit
rating is deemed "EU qualified by extension" and may still
be used by financial institutions for regulatory purposes until 30 April
2012. Further information on the EU endorsement status and on the
Moody's office that has issued a particular Credit Rating is available
on www.moodys.com.
For ratings issued on a program, series or category/class of debt,
this announcement provides relevant regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides relevant regulatory disclosures in relation
to the rating action on the support provider and in relation to each particular
rating action for securities that derive their credit ratings from the
support provider's credit rating. For provisional ratings,
this announcement provides relevant regulatory disclosures in relation
to the provisional rating assigned, and in relation to a definitive
rating that may be assigned subsequent to the final issuance of the debt,
in each case where the transaction structure and terms have not changed
prior to the assignment of the definitive rating in a manner that would
have affected the rating. For further information please see the
ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.
Moody's considers the quality of information available on the rated
entity, obligation or credit satisfactory for the purposes of issuing
a rating.
Please see Moody's Rating Symbols and Definitions on the Rating
Process page on www.moodys.com for further information on
the meaning of each rating category and the definition of default and
recovery.
Please see ratings tab on the issuer/entity page on www.moodys.com
for the last rating action and the rating history. The date on
which some ratings were first released goes back to a time before Moody's
ratings were fully digitized and accurate data may not be available.
Consequently, Moody's provides a date that it believes is
the most reliable and accurate based on the information that is available
to it. Please see the ratings disclosure page on our website www.moodys.com
for further information.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has
issued the rating.
Terry Marshall
Senior Vice President
Corporate Finance Group
Moody's Canada Inc.
70 York Street
Suite 1400
Toronto, ON M5J 1S9
Canada
(416) 214-1635
Donald S. Carter, CFA
MD - Corporate Finance
Corporate Finance Group
(416) 214-1635
Releasing Office:
Moody's Canada Inc.
70 York Street
Suite 1400
Toronto, ON M5J 1S9
Canada
(416) 214-1635
Moody's places Flint Energy Services ratings on review for upgrade