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S&P downgrades Halcon Resources
S&P said it lowered the issuer credit rating on Halcon Resources Corp. to CC from CCC+.
The agency also said it lowered the rating on its unsecured debt to CC from CCC+.
The 4 recovery rating is unchanged, indicating 30% to 50% expected default recovery.
The company's recently disclosed waiver on its maximum debt-to-EBITDA covenant could expire as soon as July 1, S&P said, and combined with its now lowered reserve-based lending facility is highly likely to result in the acceleration of the company's debt maturities.
The agency said it expects the company to face a payment default or undertake a distressed exchange at this time.
Additionally, Halcon's recently filed Form 10-Q has a going-concern qualification and the company has further disclosed it hired Tudor Pickering and Holt and Perella Weinberg Partners to assist in evaluating strategic financial alternatives, S&P said.
The negative outlook considers an expectation that Halcon is likely to face a near-term event of default and is evaluating strategic alternatives, the agency said.
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