Fitch cuts Seven Energy, notes

Fitch Ratings said it downgraded Seven Energy International Ltd.’s issuer default rating to RD from C following the announcement of the results of the consent solicitation for the $300 million 10¼% senior secured notes due 2021: 95.31% of the noteholders voted in favor of the proposal.

Simultaneously, the agency affirmed the senior secured rating of wholly owned subsidiary Seven Energy Finance Ltd.’s $300 million notes at C with a RR6 recovery rating.

Fitch said the accepted proposal qualifies as a distressed debt exchange under the criteria as it imposes a material reduction in terms compared with the original ones and is conducted to avoid a payment default. Under the new terms, Seven Energy may choose to pay interest on the notes in-kind, for example, by increasing the principal amount of the outstanding notes or by issuing additional notes for up to four coupon payments between Oct. 11, 2016 and April 11, 2018.

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