S&P lowers American Energy – Woodford

Standard & Poor’s said it lowered the corporate credit rating on American Energy – Woodford LLC to SD (selective default) from CC.

The agency also said it lowered the rating on the company’s unsecured notes to D from C.

S&P also said it removed all of the ratings from CreditWatch, where they were placed with negative implications in May.

The downgrade follows news that the company completed its previously announced debt-for-debt exchange, the agency said.

The holders of 97% of the company’s $350 million 9% unsecured notes due 2022, equating to about $339.7 million of aggregate principal, received $237.6 million in aggregate principal of new 12% second-lien notes due 2020, S&P said.

Because the holders of the unsecured notes received less than par, the agency said it views the transaction as a distressed exchange.

The company also received $100 million in equity contributions from its financial sponsors and entered into a new revolving credit facility with a borrowing base of $140 million, S&P added.

The review of the corporate credit ratings and issue ratings under the new capital structure is expected to be complete in the next few days, the agency said.

The analysis will incorporate the company’s improved leverage and liquidity position, S&P said.

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