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S&P lowers W&T Offshore, rates notes B-, CCC, CC
S&P said it lowered the corporate credit rating on W&T Offshore Inc. to SD (selective default) from CC.
The agency said it lowered the ratings on the company's 8˝% senior notes due 2019 to D from CC.
S&P also said it revised the recovery rating on this debt to 6 from 5, indicating 0 to 10% expected default recovery.
The agency also said it raised the rating on the 9% second-lien senior notes due 2020 to CCC from CC because they were not involved in the exchange.
S&P said it revised the recovery rating on this debt to 3 from 1, indicating 50% to 70% expected default recovery.
The agency also said it assigned a B- rating to the company's new 1.5 lien notes due 2019 with a recovery rating of 1, indicating 90% to 100% expected default recovery, along with a CCC rating to its new second-lien notes due 2020 with a recovery rating of 3, indicating 50% to 70% expected default recovery and CC rating to its new third-lien notes due 2021 with a recovery rating of 6, indicating 0 to 10% expected default recovery.
The ratings reflect an assessment that W&T Offshore's exchange on its 8˝% senior unsecured notes due 2019 was a distressed exchange based on the holders receiving less than par value, S&P explained, and an opinion that the company faced a realistic possibility of conventional default prior to the exchange.
The company’s corporate credit rating will be reassessed by the agency in the next few days, S&P said, and will likely be raised to CCC from SD.
The agency also said it expects to raise the D ratings on the notes involved in the tender an no further distressed transactions are expected on those notes.
The ratings also will consider the challenging operating environment for oil and gas companies at current commodity prices and W&T Offshore's new capital structure and liquidity assessment, S&P said.
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