S&P downgrades Legacy Reserves

S&P said it lowered the ratings on Legacy Reserves LP's senior secured second-lien term loan to D from CCC-. The 3 recovery rating is unchanged and indicates 50% to 70% expected default recovery.

The agency also said it lowered the ratings on the company's senior unsecured notes due in 2020 and 2021 to D from C. The 6 recovery rating is unchanged, indicating 0 to 10% expected default recovery.

Legacy Reserves announced that it elected not to make its interest payments on its senior unsecured and convertible notes due 2020, 2021 and 2023.

S&P said it does not expect the company to make these payments within 30 days.

The agency said it views the missed interest payments as a general default and lowered the issuer credit rating on Legacy Reserves to D from CCC-.

The downgrade reflects Legacy's failure to make its interest payments that was due June 3 on its senior unsecured notes and an expectation that the company will not make these payments within the 30-day grace period, the agency said.

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