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S&P downgrades C&J Energy
Standard & Poor's said it lowered the corporate credit rating on C&J Energy Services Ltd. to CCC- from B-.
The agency also said it lowered the ratings on the company's revolver and term loans to CCC- from B.
The recovery rating on the company's revolver and term loans is 3, indicating 50% to 70% expected default recovery.
The outlook is negative.
The downgrades reflect the company's unsustainable credit metrics and a belief that the company could restructure its debt or miss an interest payment over the next six months, S&P said.
Utilization and pricing for the company's completion services has weakened significantly over the past year due to the significant drop in crude oil and natural gas prices and the decline in drilling and completion activity, the agency said.
Market conditions should remain very weak, S&P added, and its debt-to-EBITDA ratio is expected to be more than 25x in 2016.
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