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Moody’s lowers Magnum Hunter
Moody’s Investors Service said it downgraded Magnum Hunter Resources Corp.’s corporate family rating to Caa3 and probability of default rating to Caa3-PD.
The agency also downgraded the rating on its $600 million 9¾% senior unsecured regular bond/debenture to Ca (LGD 5) from Caa3 (LGD 5) and $340 million senior secured second-lien term loan to B3 (LGD 2) from B2 (LGD 2).
Moody’s also said it affirmed the company’s SGL-4 speculative grade liquidity rating.
The outlook remains negative.
The company will need to do a debt-restructuring in a continued low commodity price environment, the agency said, and may miss the coupon payment on its $600 million 9¾% senior notes due on November 15 absent a substantive asset sale.
Magnum Hunter is aggressively looking to divest assets, including its midstream gas gathering system and a portion of its undeveloped acreage as a way to raise liquidity, Moody’s said.
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