Moody’s downgrades Hunt Oil

Moody’s Investors Service said it downgraded Hunt Oil Co.’s long term issuer rating to B2 from B1 and placed the rating under review for downgrade.

“The downgrade of Hunt’s issuer rating to B2 is based on the high likelihood that the company’s unsecured creditors will be subordinated to secured debt in the capital structure as part of the company’s pending renewal or replacement of its unsecured revolver,” said Pete Speer, a Moody’s senior vice president, in a press release. “The review of the rating for potential further downgrade reflects the uncertainty regarding the timing for concluding the refinancing process and the final form it will take.”

Hunt is in a refinancing process to replace its senior unsecured revolving credit facility that matures in July. As part of this effort, Hunt has been engaged in discussions with its noteholders to obtain necessary amendments to allow for a senior secured borrowing base revolving credit facility, with the necessary pledging of U.S.-proved reserves to back the facility. The negotiations have been lengthy, but the company has identified alternative approaches to secure the necessary financing, Moody’s said.

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