Moody's cuts Tristan Oil to Caa3

Moody's Investors Service said it downgraded to Caa3 the Caa2 corporate family and probability of default ratings of Tristan Oil Ltd. as well as the Caa2 rating of its $300 million and $120 million senior secured notes maturing 2012.

The outlook remains negative.

The downgrade follows an assessment of a complex series of unrated financing arrangements recently completed by the company, Moody's said.

The structure of the newly raised debt includes the issuance of a deeply discounted bond, as well as the assumption of certain financial liabilities related to the $60 million credit facility - both of which materially increase the group's gross debt while leaving the company exposed to high default risk over the near term, the agency said.

With this background, Moody's said it is concerned that the net impact of these transactions were a default and/or sale of Tristan's core operating activities to occur, would undermine the positioning of the existing bondholders and result in a lower recovery rate.

Moody's also noted that there is a limited visibility relating to the valuation of Tristan's core businesses at this time.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.