S&P: RGL Reservoir on watch

Standard & Poor’s said it placed the B long-term corporate credit rating on RGL Reservoir Management Inc. on CreditWatch with negative implications.

The ratings on the company’s first-lien term loans are unchanged at B with a recovery rating of 3, indicating 50% to 70% expected default recovery.

The ratings on the company’s second-lien term loans are unchanged at CCC+ with a 6 recovery rating, indicating 0 to 10% expected default recovery.

The CreditWatch placement reflects an expectation that RGL’s 2015 revenues and EBITDA will be drastically lower than previously forecast, S&P said.

As oil prices have dropped significantly, RGL’s core market postponed expansion projects and significantly cut back capital spending, the agency said.

Due to the uncertainty about the pickup in oil prices, RGL is not expected to generate any material revenues associated with growth projects in the Canadian oil sands sector in the near term, S&P said.

The company has a leading market position in providing slotted and seamed liners in the Western Canadian sedimentary basin and provides other products to enhance oil recovery in the oil industry, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.