Fitch downgrades Seven Energy

Fitch Ratings said it downgraded Seven Energy International Ltd.'s issuer default rating to C from CC.

The agency also said it affirmed the C senior secured rating on wholly-owned subsidiary Seven Energy Finance Ltd.'s $300 million 10¼% secured notes due 2021. The recovery rating on the notes is RR6.

The downgrade follows news that Seven Energy started restructuring negotiations for its $300 million secured notes and $100 million secured private notes, Fitch explained.

The restructuring involves the coupon capitalization for up to four periods starting Oct. 11, subject to certain conditions, the agency said.

According to the company, the deal has preliminarily been agreed with about 77% of bondholders, Fitch said.

Based on the announced deal terms, the agency said it believes the proposed restructuring is likely to be classified as a distressed debt exchange.

If the offer is accepted, Fitch said it will downgrade the company's issuer default rating to RD (restricted default) upon the completion.

After the restructuring, Fitch will reassess the rating once sufficient information is available, the agency said.

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