S&P cuts Cobalt, convertibles to D

S&P said it lowered its unsolicited corporate credit rating on Cobalt International Energy Inc. to D from CC.

At the same time, the agency downgraded issue-level ratings on the company's 2.625% convertible senior notes due 2019 and 3.125% convertible senior notes due 2024 to D from C.

"The downgrade reflects our assessment that the recently completed debt exchange on Cobalt's 2.625% convertible senior notes due 2019 and 3.125% convertible senior notes due 2024 was a distressed exchange based on the holders receiving less value than was promised on the original securities, and our view that the company is facing a realistic possibility of a conventional default over the next 12 months," S&P credit analyst Kevin Kwok said in a news release.

The agency expects a significant deterioration in the company's operating cash flow and liquidity in 2017 due to its higher cost offshore operations. The company has been struggling to find a buyer for its Angolan assets since an earlier deal fell through in August 2016, S&P added.

© 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.