- Weatherford (WFT -0.4%) is lower after announcing it is offering $1B of senior notes, with plans to use the proceeds to increase its recently announced tender offer to $2.1B from $1.1B.
- Citigroup says the refinancing is another positive step for WFT in reducing investor concern about the balance sheet and will provide some room for the company to raise capex and invest in working capital in the years ahead; in fact, few observers believed WFT even could execute an unsecured offering, Citi says.
- The news may suggest that WFT’s free cash flow will disappoint vs. company guidance, but Citi believes the further alleviation of concerns toward debt maturities likely outweighs the read through to free cash generation.