S&P lowers Green Field

Standard & Poor's said it lowered the corporate credit rating on Green Field Energy Services Inc. to D from CCC, reflecting a default on its credit facility with Shell Western Exploration and Production Inc.

The agency also lowered the rating on Green Field's $250 million senior notes due 2016 to CC from CCC. The recovery rating remains at 4, indicating 30% to 50% expected default recovery.

The downgrades follow news that Green Field failed to make $6 million of scheduled principle payments on its credit facility with Shell, reflecting Green Field's continued struggle to maintain sufficient liquidity in the face of its very high debt burden and weak operating cash flows, said Paul Harvey, an S&P analyst.

The rating on the $250 million senior notes, under which Green Field is in technical default, was lowered to CC, reflecting a view that the notes will need to be restructured to ease current principle and interest payment terms, Harvey said. Any such restructuring could be viewed as a distressed exchange under the agency's criteria.

Green Field has stated its intention to pursue options, including amendments or waivers to the Shell facility and senior notes, entering into a new debt facility and raising additional capital, the agency said.

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