S&P cuts Centennial Resource

S&P said it downgraded Centennial Resource Development Inc. and the rating on its senior unsecured notes to CC from CCC+ and B-, respectively.

The downgrade follows the company's announcement it launched a public exchange offer to holders of its senior unsecured notes due 2026 and 2027 a debt-for-debt exchange for pro rata shares in new second-lien secured notes due 2025 and new third-lien secured notes due 2027. The company is offering to exchange the unsecured notes at 50% of par value, the agency said.

The transaction will include: $400 million, 5 3/8%, 2026 senior unsecured notes; and $500 million, 6 7/8%, 2027 senior unsecured notes.

For: $250 million, 8%, 2025 new second-lien secured notes; and $200 million, 8%, 2027 new third-lien secured notes.

The outlook is negative. S&P said it expects to cut Centennial to SD and the ratings on the 2026 and 2027 unsecured notes to D after the transaction closes.

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