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S&P lifts Stone Energy, debt to CCC-
S&P said it raised its corporate credit rating Stone Energy Corp. to CCC- from D.
The outlook is negative.
The agency also raised the issue-level rating on the company's senior unsecured debt to CCC- from D. The recovery rating is 3, indicating an expectation of meaningful (high end of the 50% to 70% range) recovery if a payment default occurs.
S&P said the CCC- corporate credit rating reflects the risk that Stone could elect to file for Chapter 11 and/or restructure its debt within the next six months.
The agency expects the borrowing base for the company's reserve-based lending facility to decrease in the fall, further pressuring liquidity on top of lower cash flows from operations.
S&P also noted that Stone has an upcoming $300 million maturity in March 2017, and it believes the company would have trouble accessing capital markets to refinance it given current market conditions.
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