S&P cuts Key Energy ratings

Standard & Poor's lowered its corporate credit rating and senior unsecured debt ratings on Key Energy Services Inc. to B from B+ and kept the ratings on credit watch with negative implications following the company's recent announcement of receiving a notice of default from its senior note trustee for not filing its 10-K on time.

S&P said the notice of compliance deficiency from its senior trustee, which triggers a 60-day cure period in which the company has to cure the technical default under its note indentures, further heightens concerns regarding the company's liquidity position and could severely affect the financial condition and solvency of the firm.

S&P said Key does not appear to have the financial resources to pay the approximately $375 million of accelerated debt obligations. Acceleration of Key's debt would likely necessitate a bankruptcy filing.

Resolution of the watch listing is dependent on Key receiving waivers from its noteholders, filing its 10-K, and demonstrating sound performance by the firm's new management team.

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