Moody’s cuts Forum Energy

Moody’s Investors Service said it downgraded Forum Energy Technologies, Inc.’s corporate family rating to B2 from B1, its probability of default rating to B2-PD from B1-PD and its senior unsecured notes to B3 from B2. The speculative grade liquidity rating was lowered to SGL-3 from SGL-2. The outlook remains negative.

“The downgrade reflects margin and EBITDA weakness Forum will continue to experience through 2020, following the protracted 2015-16 downturn,” said John Thieroff, a Moody’s senior analyst, in a press release.

The B3 rating on the company’s senior unsecured notes reflects their subordinate position to the company’s $300 million senior secured revolving credit facility’s priority claim to the company’s assets. The size of the senior secured claims relative to Forum Energy’s senior unsecured notes results in the notes being rated one notch below the B2 corporate family rating, Moody’s said.

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