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Gold/Mining/Energy : MHRC on the OTC market -- Ignore unavailable to you. Want to Upgrade?

To: Investor Clouseau who wrote (187)

1/29/2016 5:21:03 PM

From: Mad2

Respond to of 188

Rating Action: Moody's lowers Magnum Hunter's PDR to D on Chapter 11 filing

Global Credit Research - 15 Dec 2015

Approximately $940 million of rated debt affectedNew York, December 15, 2015 -- Moody's Investors Service (Moody's) downgraded Magnum Hunter Resources Corporation's (MHR) Probability of Default Rating (PDR) to D-PD from Caa3-PD, Corporate Family Rating (CFR) to Ca from Caa3, senior secured second-lien term loan rating to Ca from B3, and the senior unsecured notes rating to C from Ca. The negative outlook and the SGL-4 Speculative Grade Rating were maintained.

These actions were prompted by an announcement on December 15, 2015 that MHR and certain of its wholly-owned subsidiaries had filed voluntary petitions for reorganization under Chapter 11 of the US Bankruptcy Code in the state of Delaware.

Issuer: Magnum Hunter Resources Corporation
..Downgraded:
....Probability of Default Rating, Downgraded to D-PD from Caa3-PD
....Corporate Family Rating, Downgraded to Ca from Caa3
....US$600M 9.75% Senior Unsecured Bond/Debenture, Downgraded to C (LGD5) from Ca (LGD5)
....US$340M Senior Secured 2nd Lien Term Loan, Downgraded to Ca (LGD4) from B3 (LGD2)
..Maintained:
....Speculative Grade Liquidity Rating, SGL-4
....Outlook, Negative Outlook
RATINGS RATIONALE
MHR has entered into a restructuring support agreement with roughly 75% of its debtholders to convert substantially all of its prepetition funded debt to equity. The support agreement also allows for a debtor in possession (DIP) financing in the form of a $200 million multi-draw term loan that will be backstopped by lenders who are parties to the restructuring support agreement. The DIP facility will help the company run its day-to-day operations during the restructuring process and make payments to its vendors, employees and key stakeholders. MHR expects to exit the bankruptcy process in April 2016.
Shortly following these rating actions, Moody's will withdraw all of MHR's ratings (refer to Moody's ratings withdrawal policy on moodys.com) and outlook.
The principal methodology used in these ratings was Global Independent Exploration and Production Industry published in December 2011. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.
Magnum Hunter Resources Corporation (MHR) is a Irving, Texas based publicly traded oil and gas exploration and production company with principal assets in the states of West Virginia, Ohio, and North Dakota.
REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this rating action, and whose ratings may change as a result of this rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Sajjad Alam
Asst Vice President - Analyst
Corporate Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Steven Wood
MD - Corporate Finance
Corporate Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653