Moody’s cuts Talos outlook to negative

Moody's Investors Service said it affirmed Talos Production LLC's B3 corporate family rating, B3-PD probability of default rating and Caa1 senior unsecured notes rating.

The agency also assigned a SGL-4 speculative grade liquidity rating.

The outlook was changed to negative from stable, reflecting the company's significant reliance on external sources of capital, and the risk of reduced revolver availability over the next 12 months.

"Talos' SGL-4 rating reflects the company's expected negative cash flow over the next 12 months and weak potential availability under its revolving credit facility as its existing 2015 hedges roll-off," Moody's vice president Amol Joshi said in a news release. "The company's outlook could be returned to stable presuming Talos successfully rebuilds its liquidity."

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