04.08.2016 - Fitch: Weak Commodity Prices Raise US Nat Resource Sub Risk
Weak commodity prices could continue to raise the subordination risk for natural resource fallen angels, according to Fitch Ratings. Additionally, while lien limitations provide a line of subordination defense, the lack of explicit guarantee language and, in some cases, lax lien carve-out provisions can provide fallen angels with additional subordination opportunities. The commodity downcycle has created a need for companies in the natural resource sector to preserve and generate liquidity. The traditional playbook has been some combination of operating cost cuts, capex reductions, asset sales and secured/unsecured debt and equity issuances...............................................Full Article: Source
Print