DUFF & PHELPS RATES BAROID SENIOR NOTES 'BBB-'
CHICAGO, April 5 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a `BBB-' (Triple-B-Minus) rating to Baroid Corporation's (NYSE: BRC) proposed issue of $125 million senior notes due 2003. The rating reflects Baroid's strong market positions in the oil field services industry, including a leading position in drilling fluids both domestically and internationally. Although the drilling fluids business remains a leading source of the company's revenues and operating cash flow, Baroid's reliance on this segment has been lessened through acquisitions and the development of other products and services, so that now the company's business mix is relatively diverse. The company's operations are also geographically diverse with international (non-North American) operations providing over three-quarters of the company's revenue and operating cash flow. Management is committed to balance sheet improvement with a goal of reducing debt to 30 percent of total capitalization from the current level of 41 percent. Meaningful improvement, however, is dependent on higher capital spending by oil and gas companies and a greater level of rig activity and, thus, may be several years away. Partially compensating for the historical volatility of this industry is a variable-compensation mechanism which provides some downside earnings protection during weaker-than-expected industry environments. Going forward, capital needs, excluding acquisitions, are expected to be moderate and more than covered by operating cash flow. -0- 04/05/93 /CONTACT: David W. Eisinger of Duff & Phelps Credit Rating Co., 312-368-3145/ (BRC)
CO: Baroid Corporation ST: Texas IN: OIL SU: RTG
AH -- NY060 -- 3191 04/05/93 16:47 EDT
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|Date:||Apr 5, 1993|
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