S&P cuts Milagro, notes

Standard & Poor's said it lowered its corporate credit rating on Milagro Oil & Gas Inc. to CCC from CCC+. The outlook is negative.

The agency said it lowered the issue-level rating on Milagro's second-lien secured notes to CCC from CCC+. The recovery rating remains 3.

"The rating action reflects our assessment that Milagro could face a near-term liquidity crisis," said S&P credit analyst Christine Besset in a news release.

"The company is likely to be in violation with the maximum leverage covenant under its revolving credit facility at the end of first-quarter 2013 as this covenant becomes more stringent and the company's ability to generate EBITDA remains weak."

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