Fitch lowers MIE Holdings

Fitch Ratings said it downgraded MIE Holdings Corp.'s long-term issuer default rating to C from CCC.

The agency also said it downgraded the rating on MIE's 2018 bonds to CC with recovery rating at RR3 from CCC.

Fitch also placed the CCC rating and RR4 recovery rating on the company's 2019 bonds on Rating Watch negative.

The downgrades follow MIE's cash tender offer for any or all of its 2018 bonds and a partial tender offer for its 2019 bonds, Fitch said, as well as the company's proposed acquisition of upstream oil and gas assets in Canada for C$722 million.

The downgrades also are driven by MIE's tender offer for its 2018 bonds, which Fitch said it considers a distressed debt exchange.

The CC rating on the 2018 bonds reflects the recovery based on the offer price for the tender, the agency noted.

The partial tender offer for MIE's 2019 bonds is not immediately considered a distressed exchange, Fitch added.

The decision to place the ratings of the 2019 notes on negative watch considers the potential for lower recovery prospects as a result of planned new secured debt to finance the cash tender offer and additional secured debt to fund the proposed acquisition, which is likely to impair the recovery prospects for the note holders, the agency said.

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