S&P cuts Vine Oil & Gas

S&P said it cut Vine Oil & Gas LP to CCC+ from B, citing an increasing refinancing risk.

Vine’s notes are trading at a deep discount to par, which increases the risk the company will need a distressed exchange or restructuring, S&P said.

“We note that while the company indicates it is not exploring debt exchanges, we believe that if the current elevated yield on the company's notes persists, we believe there is potential it may consider undertaking a below-par debt transaction that we would likely view as a selective default,” S&P said in a press release.

The yield to worst on Vine’s senior notes has risen to about 25%, S&P said.

The outlook is negative, which the agency said is based on the possible need for an exchange or restructuring and favorable market conditions to refinance its first-lien credit facility.

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