S&P rates W3 notes CCC

S&P said it affirmed the CCC corporate credit rating on W3 Co.

The agency also said it revised the recovery rating on the first-lien term loan and revolver to 4, indicating 30% to 50% expected default recovery, from 3.

The recovery rating on the second-lien term loan remains at 6, indicating 0 to 10% expected default recovery.

S&P also said it assigned a CCC rating to the $10 million first-lien tranche B notes and $21.2 million first-lien tranche C notes with a 4 recovery rating on both tranches, indicating 30% to 50% expected default recovery.

The outlook is negative.

The ratings reflect a view that the company will be able to support its financial obligations over the next 12 months with revised covenants on its debt, the agency said.

The revolver is expected to remain available and within compliance once the covenants resume when revised covenants take effect following the waiver period, S&P explained.

The agency said it assumes W3 will continue to expand in-plant service centers as exploration activity in 2017 increases by upstream companies generating additional positive cash flow.

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