S&P cuts Preferred Proppants to D

Standard & Poor's said it lowered its ratings, including its corporate credit rating, on Preferred Proppants LLC to D from CCC and removed all ratings from CreditWatch, where they were placed with negative implications on Oct. 17.

The agency also lowered its issue ratings on Preferred Proppants' senior secured bank loans. The 3 recovery rating on the bank loans indicates an expectation for substantial (50%-70%) recovery.

Preferred Proppants indicated that it did not make its quarterly interest and principal payment after reaching a forbearance agreement with its lenders in its third quarter. The company is privately held and the terms of the forbearance agreement are not public.

The company had weak liquidity and had been faced with covenant constraints that S&P said it attributed to high leverage and weaker-than-expected performance as competition in the hydraulic fracturing sand and proppant industry has intensified.

© 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.