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Rowan Strengthens Credit Profile With New Revolving Facility

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Rowan Companies plc recently announced the amendment of the current revolving credit facility. The company has also signed an accord that will likely extend its senior unsecured revolving credit profile.  

Following these moves, the total initial borrowing capacity of the company will likely be $1.27 billion. The company expects an additional borrowing capacity of $955 million from the new credit profile, spanning five years. The amendment made to the existing credit profile will likely provide Rowan with $311 million of a credit facility.   

The current facility is expected to mature by January 2021, while the same for the new credit profile will be in May 2023.

The debt-to-capitalization ratio of the company is 32.2%, compared with the industry’s 40.4%. Also, Rowan has no current debt and its long-term debt hasn’t increased through first-quarter 2018, reflecting a strong credit profile. The amendment of the existing credit facility and the new agreement will strengthen the company’s balance sheet further.

 

Based in Houston, TX, Rowan has an advanced fleet of offshore drilling rigs. Over the past year, the stock has rallied 16.7%, outperforming the industry’s 10.1% gain.

 

Currently, the stock carries a Zacks Rank #3 (Hold), implying that it will perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, a few better-ranked players in the energy sector are BP plc (BP - Free Report) , Occidental Petroleum Corporation (OXY - Free Report) and WildHorse Resource Development Corporation (WRD - Free Report) . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BP managed to beat the Zacks Consensus Estimate in three of the last four quarters.

Occidental Petroleum is expected to record earnings growth of 333.7% in 2018.

WildHorse is likely to see year-over-year earnings growth of 288.4% in 2018.

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