Investing.com -- S&P Global Ratings has lifted the credit rating of KLX Energy Services Holdings (NASDAQ: KLXE ) Inc., a Houston-based oilfield services company, to ’CCC+’ from ’ CCC (WA: CCCP )’. The outlook was also adjusted to ’stable’ from ’negative’. This change was triggered by the company’s recent actions to manage its debt. KLX has closed on a new five-year, $232 million senior secured, floating-rate pay-in-kind (PIK) note offering, and a new asset-based lending facility to refinance its upcoming debt maturities at par value.

With these transactions, KLX will not have any significant debt maturities until March 2028. The company managed to refinance its upcoming note maturity due in November 2025. This was achieved by exchanging $144 million of existing note holders into the new notes at par. The remaining proceeds, along with cash on hand, were placed into escrow to fully redeem existing notes at par on March 30, 2025. The new asset-based lending balance is expected to be consistent with the amount drawn on the prior facility, which was $50 million as of December 31, 2024.

The stable outlook reflects the expectation for steady credit measures, including average funds from operations to debt of about 20% in 2025 and 2026. KLX is also expected to generate approximately break-even free cash flow in 2025.

However, following these developments, S&P Global Ratings withdrew all ratings on KLX, including the ’CCC+’ issuer credit rating and issue-level rating, at the request of the company. This decision was made on March 21, 2025.

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