S&P downgrades Comstock notes to D

S&P said it lowered its issue-level rating on Comstock Resources Inc.'s 9½% senior unsecured notes due 2020 to D from CCC. The recovery rating remains 6, indicating an expectation of negligible (0% to 10%) recovery in the event of the default.

The issue-level rating on the company's 7¾% senior unsecured notes due 2019 remains D (recovery rating 6) and the issue-level rating on its senior secured debt remains B (recovery rating 2).

The corporate credit rating remains SD.

S&P said the downgrade of the 9½% senior unsecured notes due 2020 follows Comstock's announcement in its most recent SEC form 10-Q dated May 4, that it retired $16.7 million of the 9½% senior unsecured notes due 2020 along with an additional $64.3 million of the 7¾% senior unsecured notes due 2019 in April and May for total common equity and cash considerations totaling $9.2 million.

The agency views the transaction as a distressed exchange because at the close of the transaction investors received less than what was promised on the original securities.

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