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S&P switches W&T view to stable
S&P said it changed the outlook for W&T Offshore Inc. to stable from negative and affirmed the CCC+ issuer rating.
“Improving cash flows and a focus on free cash flow generation should both strengthen W&T's financial measures and help support liquidity over the next 12 months. We expect FFO/debt to average between 15%-20% and debt/EBITDA to be around 4x. We also expect W&T to generate $50 million-$60 million of free cash flow, which will support expected debt amortization of about $44 million in 2022,” S&P said in a press release.
The outlook reflects an improved forecast for hydrocarbon prices that should sustain debt/EBITDA of around 4x and FFO/debt above 15% for the next 12 months, the agency said.
S&P also removed the rating on W&T's 9¾% second-lien notes due 2023 from CreditWatch, where it was placed with negative implications on May 24, after the sale of its Mobile Bay assets to a wholly owned SPV, and affirmed the B rating with a 1 recovery rating. The 1 recovery reflects an expectation of very high (rounded estimate 95%) recovery in default.
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