S&P cuts Midstates CCR, debt

Standard & Poor's said it lowered its corporate credit rating on Midstates Petroleum Co. Inc. to SD from B- and the issue-level rating on the company's senior unsecured debt to D from CCC+.

The downgrades reflect the exchange offer for a portion of the company's 2020 and 2021 unsecured notes for unsecured third-lien notes due 2020. The agency also revised the recovery rating on the unsecured notes to 6 from 5, indicating negligible (0% to 10%) recovery in a default scenario to reflect the addition of the third-lien notes.

S&P said the downgrades follow Midstates' announcement that it has come to an agreement with holders of portions of its senior unsecured notes to exchange for third-lien unsecured notes.

"We view the transaction as a distressed exchange because at the close of the exchange unsecured debt investors received value of less than what was originally promised on the senior unsecured notes," S&P credit analyst Michael Tsai said in a news release.

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