Fitch cuts Tristan Oil view to negative

Fitch Ratings said it affirmed Tristan Oil Ltd.'s senior unsecured rating at B+/RR4 and revised the outlook on the company's B+ issuer default rating to negative from stable following news that Tristan will issue an additional $120 million of senior secured notes after it had raised $300 million of senior secured debt under the same indenture in December.

Part of the proceeds is expected to be used to refinance subordinated debt, with the remainder to be used for reinvestment in the business.

The agency said Tristan's financial profile may be negatively affected by an ambitious capital expenditure program, particularly if currently high hydrocarbon prices return to more normal levels in the medium term or if the company fails to meet challenging production and profit targets.

Fitch will continue to monitor Tristan's financial and operational progress and said that any significant deviation from Tristan's targets will increase the pressure on the current ratings.

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