Fitch cuts Tristan Oil

Fitch Ratings said it has downgraded Tristan Oil Ltd.'s long-term foreign-currency issuer default rating to restricted default (RD) from C and removed it from rating watch negative. Its senior unsecured rating is C with a recovery rating of RR6.

The downgrade reflects the fact that Tristan is still unable to make interest payment on the outstanding eurobonds following the expiration of a 30-day grace period at the end of July, Fitch said.

Fitch said the recent cancellation of the subsoil use contracts of two operating companies - Kazpolmunay and Tolkynneftegaz - by the Kazakh Ministry of Oil and Gas may trigger a bondholders' put option under a change of control provision in the bond documentation, the agency said.

If a put option is triggered, Fitch said it believes that Tristan is unlikely to be able to meet its obligations to repurchase the bonds due to its weak financial position.

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