Fitch cuts four energy companies

Fitch Ratings said it downgraded four Latin American energy corporates' foreign- and local-currency issuer default ratings following the downward revision to Fitch's global oil and gas price assumption.

The decline in global hydrocarbon prices will tighten Latin American energy companies EBITDA margins, thus increasing leverage metrics over the rated horizon, halting expansion plans and tightening liquidity. Fitch expects energy companies will adjust their capital expenditures to prioritize reserve replenishment if possible and preserve cash flow through 2021.

Fitch downgraded Frontera Energy Corp. to B- from B+, Gran Tierra Energy International Holdings Ltd. to CCC from B and Peru LNG SRL to B+ from BBB- due to their weaker resistance to lower hydrocarbon prices and the impact on their respective capital structures. Tecpetrol Internacional SL's downgrade to BB from BB+ reflects its high exposure to CCC and B rated operating environments and off-takers, which Fitch expects will be further challenged in a volatile price environment.

Fitch placed Fronteram, Gran Tierra and Tecpetrol on rating watch negative. The outlook for the three companies is negative.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.