Whiting Petroleum Corp. New Senior Unsecured And Subordinated Notes Existing Unsecured Debt Rating Raised

Stocks and Financial Services Press Releases Thursday July 14, 2016 08:45
NEW YORK--14 Jul--S&P Global Ratings

NEW YORK (S&P Global Ratings) July 13, 2016--S&P Global Ratings said todaythat it assigned its 'B+' issue-level rating and '3' recovery rating toDenver-based oil and gas exploration and production company Whiting PetroleumCorp.'s new senior unsecured convertible notes maturing in 2019, 2020, 2021,and 2023. We assigned the new senior subordinated convertible notes maturing

in 2018 a 'B-' and '6' recovery rating, indicating negligible (0%-10%)recovery in the event of a default. The '3' recovery rating on the seniorunsecured convertible notes reflects our expectation of meaningful (50% to70%, lower end of the range) recovery to creditors in the event of a paymentdefault. The company exchanged its convertible notes for $1.092 billion ofWhiting's unsecured and subordinated bonds with similar coupon rates andmaturities. The convertible notes will mandatorily convert to equity uponWhiting's stock price meeting certain thresholds.

At the same time, we raised the issue-level rating on Whiting's remainingsenior unsecured notes to 'B+' from 'B' and revised the recovery rating onthese notes to '3' from '5'. The revised recovery rating reflects ourexpectation of meaningful (50% to 70%, lower end of the range) recovery tocreditors in the event of default and incorporates Whiting's reducedcommitment amount on its reserve-based loan facility (to $2.5 billion from$3.5 billion), as well as a $468 million reduction in unsecured debt following

an earlier exchange for convertible notes and subsequent conversion to equity.

The issue-level and recovery ratings on the company's senior secured debt of'BB' and '1', respectively, and senior subordinated notes of 'B-' and '6',respectively, are unchanged. The '1' recovery rating indicates very high(90%-100%) recovery to creditors in the event of default.

Our 'B+' corporate credit rating and negative outlook on Whiting areunchanged. The rating reflects our assessment of the company's satisfactorybusiness risk profile, highly leveraged financial risk profile, and adequateliquidity.

For a complete credit rating rationale, see our research update "WhitingPetroleum Corp. Ratings Affirmed Following Debt Exchange; Outlook Negative,"published March 22, 2016.

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