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    S&P revises Seacor Smit's rating

    News // May 24, 2002
    In mid-May, Standard & Poor's (S&P) said had re-affirmed its ratings on oilfield servicescompany Seacor Smit. At the same time, S&P revised the ratings outlook to positive from stable. Houston, Texas-based Seacor has about $280 million in outstanding debt.

    "The outlook change reflects the benefits Seacor will get from the pending $578 million merger of Chiles Offshore Offshore with ENSCO International. This advances the options for Seacor to monetize its 27.3 per cent stake in the rig company," said Standard & Poor's credit analyst Bruce Schwartz. "It also reflects the company's good financial and investment discipline and strengthening of its balance sheet through the current business cycle downturn," Schwartz added.

    The ratings on Seacor reflect the company's position as a leading operator of high-quality marine vessels that support the offshore oil and gas exploration and production industry with investments in the offshore drilling and inland barge industries, anentrepreneurial management team that actively manages its portfolio of assets, and conservative financial policies.

    The positive outlook points to the potential for an upgrade as the industry cyclically recovers and the company makes progress on its newbuild programme.

    While Seacor is expected to be acquisitive, the company has built a substantial financial cushionrelative to the rating. Thus, provided that leverage does not spike beyond the company's stated ceiling of about 40 per cent and the prospective transaction economics are favourable, the company's ratings still could be raised despite a likely increase in leverage.

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