Moody’s drops Denver Parent, Venoco

Moody's Investors Service said it downgraded Denver Parent Corp.’s corporate family rating to Ca from Caa2 and revised the probability of default rating to Ca-PD/LD from Caa2-PD.

The agency also downgraded Denver Parent’s senior unsecured rating to C from Ca, and operating subsidiary Venoco, Inc.'s senior unsecured notes rating to Ca from Caa2.

The outlook remains negative.

The speculative grade liquidity rating of SGL-4 at Denver Parent remains unchanged.

Moody's said it considers Venoco's debt exchange that closed in April as a distressed exchange for its senior unsecured debt, which is an event of default under the agency’s definition of default.

The company exchanged $194 million of unsecured debt (out of the total $500 million originally issued) due February 2019 for $150 million of new second-lien notes due February 2019. Moody’s expects Venoco to consummate further exchanges as it seeks to manage its untenable capital structure.

The agency appended Denver Parent’s revised Ca-PD probability of default rating with an "/LD" designation indicating limited default, which will be removed after three business days.

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