Nov 20 - Standard & Poor's Ratings Services today assigned issue-level and
recovery ratings to Stallion Oilfield Holdings Inc.'s $500 million
senior secured term loan facility due 2017. The assigned issue rating on the
term loan is 'B' (the same as the corporate credit rating). The recovery rating
on this debt is '3', indicating our expectation of meaningful (50% to 70%)
recovery in the event of default.
The company intends to use proceeds to redeem the remaining $134 million
outstanding on its existing 10.50% senior secured notes due 2015 and to pay a
one-time cash dividend of $385 million to its direct equity holders. While the
company is increasing the total amount of debt outstanding, its recovery
rating still remains '3', although at the lower end of the '3' range.
The ratings on Houston-based Stallion Oilfield Holdings Inc. (Stallion)
reflect our assessment of the company's "vulnerable" business risk and
"aggressive" financial risk. The ratings incorporate the company's
participation in the highly cyclical North American oilfield services market
and the company's relatively small scale. Ratings also reflect the current
relatively good market conditions, moderate debt leverage, and low annual
maintenance capital spending requirements.
RELATED CRITERIA AND RESEARCH
-- Methodology: Business Risk/Financial Risk Matrix Expanded, Sept. 18,
-- Liquidity Descriptors For Global Corporate Issuers, Sept. 28, 2011
-- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008
Stallion Oilfield Holdings Inc.
Corporate credit rating B/Stable/--
$500 mil senior secured facility due 2017 B
Recovery rating 3
Complete ratings information is available to subscribers of RatingsDirect on
the Global Credit Portal at www.globalcreditportal.com. All ratings affected
by this rating action can be found on Standard & Poor's public Web site at
www.standardandpoors.com. Use the Ratings search box located in the left