S&P puts Tullow on positive watch

S&P said it revised the CreditWatch on Tullow Oil’s ratings to positive from negative where they were placed on Feb. 5.

Tullow plans to refinance its capital structure which will remove any liquidity concerns for the next 12-18 months, the agency said.

If the financing closes as expected, S&P said it plans to upgrade Tullow to B- from CCC+.

As part of the refinancing, Tullow plans to sell $1.8 billion in senior secured notes and use balance sheet cash to repay its $1.4 billion outstanding under its reserve-based lending (RBL) facility, $300 million in convertible notes due 2021 and $650 million in unsecured notes due 2022.

“The transaction will remove liquidity concerns, because following the transaction, the next substantial maturity will be in 2025, when the $800 million unsecured notes are due,” S&P said in a press release.

S&P said it plans to resolve the CreditWatch once the refinancing closes.

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