S&P cuts W&T Offshore

Standard & Poor’s said it lowered its corporate credit rating on W&T Offshore Inc. to CCC- from B-. The outlook is negative.

At the same time, S&P lowered its issue-level rating on the company’s secured debt to CCC+ from B+. The recovery rating on this debt is 1, indicating an expectation of very high (90% to 100%) recovery in the event of a payment default.

S&P also lowered its issue-level rating on the company’s unsecured debt to CC from CCC+. The recovery rating is 5, indicating an expectation of modest (10% to 30%, higher half of the range) recovery in the event of a payment default.

“The downgrade follows W&T Offshore’s announcement that it has drawn down nearly the maximum amount available on its credit facility and hired legal and financial advisors,” said S&P credit analyst Stephen Scovotti in a news release. “The rating reflects our view that W&T Offshore could announce a debt exchange or restructuring within the next six months that we would view as distressed.”

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