S&P downgrades Helix Energy

Standard & Poor's said it lowered the senior secured debt ratings on Helix Energy Solutions Group Inc. to B+ from BB- and revised the recovery rating on these issues to 2, indicating 70% to 90% expected recovery in a default, from 1.

The rating on the company's senior unsecured debt remains at CCC+ and the recovery rating remains at 6, indicating 0% to 10% in a default.

The ratings reflect the increase in secured debt and the resulting lower recovery prospects for senior secured lenders following news that the company amended and extended its revolving credit facility with availability increasing to $600 million from $435 million, S&P said.

Helix will use its revolver to pay down $109.4 million of its term loan B and reduce the principal balance on the term loan to $300 million, the agency said.

The downgrades reflect an increase in secured debt, given an assumption that an issuer will fully draw on its revolver before defaulting, S&P said.

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