Moody’s drops, to withdraw Key Energy PDR

Moody's Investors Service said it downgraded Key Energy Services, Inc.'s probability of default rating to D-PD from Ca-PD/LD following its Chapter 11 filing on Oct. 24.

The company’s other ratings were unchanged.

Shortly following this action, the agency will withdraw all ratings and the rating outlook of Key Energy, consistent with its practice for companies operating under the purview of the bankruptcy courts wherein information flow typically becomes much more limited.

The downgrade of the probability of default rating to D-PD reflects Key Energy's filing under Chapter 11 in the U.S. Bankruptcy Court in Wilmington, Delaware. On Sept. 21, the company began solicitation of votes for the acceptance of a prepackaged bankruptcy plan as well as for a rights offering, and through Oct. 24, all of its secured term loan lenders and nearly all of its senior unsecured bondholders had agreed to support the plan.

The company is looking to reduce its debt burden by $725 million during the bankruptcy process.

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