S&P lowers Memorial Production

S&P said it lowered the corporate credit ratings on Memorial Production Partners LP to D from CC.

The agency also said it lowered the senior unsecured issue-level rating to D from C.

The recovery rating on this debt is 6, indicating 0 to 10% expected default recovery.

The downgrades reflect Memorial Production’s failure to make the coupon payment due under its 2021 notes within the 30-day grace period, S&P said.

The agency also said it believes that the partnership will likely elect not to meet its financial obligations until it has agreed on a financial restructuring plan with them.

The company entered into a forbearance agreement through Dec. 7 with certain holders of the notes, S&P explained. The partnership also reached an agreement with the lenders under its revolving credit facility to extend through Dec. 16, the waiver previously granted in connection with the company’s missed coupon payment on the notes.

The agency noted that the company’s operations are continuing as normal across the group's asset base while discussions with lenders are ongoing.

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