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S&P lowers Gastar Exploration
Standard & Poor’s said it lowered the corporate credit rating on Gastar Exploration Inc. to CCC- from CCC+.
The agency also said it lowered the rating on the company’s senior secured debt to C from CCC-. The recovery rating on this debt is 6, indicating 0 to 10% expected default recovery.
The outlook is negative.
The downgrades follow news that Gastar had just $29 million of cash on hand and a fully drawn revolver, S&P said.
The company’s borrowing base current stands at $180 million, but will be reduced to $100 million at the earlier of the close of the Appalachian asset sale or April 10, the agency said.
The proceeds from the Appalachian asset sale are expected to be $80 million, S&P said.
The negative outlook reflects a view that the company could miss an interest payment or restructure its debt over the next six months, the agency said.
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