S&P cuts Gulf Finance

S&P said it lowered the ratings on Gulf Finance LLC and its term loan to CCC+ from B-. The agency also revised the recovery rating on the term loan to 3 from 2, indicating an expectation for meaningful (50%-70%; rounded estimate: 60%) recovery for the company’s lenders in the event of a payment default.

After having leverage of more than 10x for several years and given S&P’s view that its EBITDA generation will not materially improve in 2020, the agency said it considers Gulf Finance’s capital structure to be unsustainable over the long term.

“Although we do not envision a short-term default in our base-case scenario, we believe that the company will face difficulties in fully refinancing its $1.15 billion term loan due 2023 if its EBITDA generation and margins do not materially improve in 2020 and 2021,” said S&P in a press release.

The outlook 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.