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Moody’s downgrades Osum
Moody’s Investors Service said it downgraded Osum Production Corp.’s corporate family rating to Caa2 from B3, probability of default rating to Caa2-PD from B3-PD, secured revolving credit facility rating to B1 (LGD 1) from Ba3 (LGD 4) and secured term loan rating to Caa2 (LGD 4) from B3 (LGD 4).
The outlook is negative.
The speculative grade liquidity rating of SGL-2 was withdrawn.
This action resolves a review for downgrade that began in January.
The downgrades reflect the material decline in Osum’s cash flows expected in 2016 and 2017, which will result in weak leverage and coverage metrics, Moody’s said.
The ratings also consider the company’s weak leverage with a debt-to-EBITDA ratio of 11x, the agency said.
The ratings are supported by Osum’s good liquidity and hedge position in 2016, the agency said.
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