Moody’s lowers Lightstream

Moody’s Investors Service said it downgraded Lightstream Resource’s corporate family rating to B3 from B2, probability of default rating to B3-PD from B2-PD and its senior unsecured notes rating to Caa2 from Caa1.

Moody’s also lowered the company’s speculative grade liquidity rating to SGL-4 from SGL-3.

The outlook was revised to negative from stable.

The downgrades reflect Lightstream’s declining production and an expectation that the downward commodity cycle will result in a decrease to the revolver commitment level in the second quarter of 2015, Moody’s said.

Lower projected EBITDA also is expected to pressure a leverage covenant, which will require relief from its banks, the agency said.

The ratings also consider Lightstream’s weak liquidity position, high debt level, very low leveraged full-cycle ratio and a base decline rate that requires significant sustaining capital expenditure to maintain production, Moody’s said.

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