NEW YORK (Standard & Poor's) Dec. 10, 2012--Standard &
Poor's Ratings Services today revised its recovery rating on
Newpark Resources Inc.'s $172.5 million 4% senior unsecured
convertible notes due 2017 to '3' from '5'.
At the same time, we raised our issue rating on the notes to
'B' from 'B-'. The '3' recovery rating indicates our expectation
of meaningful (50% to 70%) recovery in the event of a payment
default. The 'B' corporate credit rating on Newpark Resources
Our revised recovery rating reflects our revised, higher
valuation for the company in a default scenario. For our full
recovery analysis, see Standard & Poor's recovery report on
Newpark Resources, to be published shortly on RatingsDirect.
The 'B' rating and stable outlook on Newpark Resources
reflects our assessment of the company's "vulnerable" business
risk, "aggressive" financial risk, and "strong" liquidity.
Newpark operates in three business lines: drilling fluids,
composite mats, and environmental services, with drilling fluids
accounting for over 80% of revenues and 50% of operating income.
Our ratings incorporate Newpark's small scale relative to its
main competitors in the drilling fluids segment, its dependence
on one product line, its lower margins relative to its mid-cap
oilfield service peers, along with its low leverage and strong
Related Criteria And Research
Criteria Guidelines For Recovery Ratings On Global
Industrials Issuers' Speculative-Grade Debt, Aug. 10, 2009
Temporary contact numbers: Carin Dehne-Kiley (917-496-8208);
Lawrence Wilkinson (212-991-8514)
Newpark Resources Inc.
Corporate credit rating B/Stable/--
Rating Raised; Recovery Rating Revised
$172.5 mil 4% convertible nts due 2017 B B-
Recovery rating 3 5