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S&P downgrades Vallourec
Standard & Poor’s said it lowered the long-term corporate credit rating on Vallourec to BB- from BB+.
The agency also said it lowered the long-term issue rating on Vallourec’s senior unsecured debt to BB- from BB+. The 3 recovery rating is unchanged, indicating 50% to 70% expected default recovery.
The agency also said it affirmed the B short-term rating.
The outlook is negative.
The two-notch downgrade reflects much more pessimistic assumptions regarding the prolonged trough in demand and pricing pressures in the oil and gas sector, S&P said.
The low prices will hurt Vallourec’s key clients’ investments globally, notably those of U.S. shale producers, the agency said.
The demand from Petrobras – one of Vallourec’s largest clients – also is an area of uncertainty, S&P said.
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