Moody’s cuts Tapstone

Moody’s Investors Service said it downgraded Tapstone Energy, LLC’s probability of default rating to D-PD on missed interest payments. Moody’s also affirmed Tapstone’s corporate family rating at Ca and senior unsecured notes rating at C. The outlook remains negative.

The downgrade of the PDR to D-PD follows Tapstone’s skipped interest payments in December for its senior notes and secured revolver, as well as the expiration of the original grace periods, which Moody’s deems a default. Before the expiration of the original grace periods, Tapstone entered into a noteholder waiver agreement which extended the grace period until the end of January.

It also amended its forbearance agreement with revolver lenders to permit delayed bank interest payments until the end of January.

“Tapstone’s Ca CFR, C unsecured notes rating and negative outlook continue to reflect the company’s unsustainable debt load that will likely be restructured, resulting in significant losses to bondholders and Moody’s view on recovery,” Moody’s said in a press release.

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