SandRidge Ratings Cut by S&P After Energy Debt-Share Exchange

SandRidge Energy Inc. had its corporate credit rating reduced to CCC+ from B by Standard & Poor’s Ratings Services after the oil-and-gas explorer swapped shares for two classes of notes held by a single investor.

S&P said Thursday it lowered Oklahoma City-based SandRidge to seven levels below investment grade. The ratings company said it might view the transaction as a distressed exchange depending on the value of the shares when the deal closes. S&P said that even if this deal is not considered distressed, future swaps might be.

SandRidge will give the holder stock in exchange for a combined $50 million of its 7.5 percent notes maturing in March 2021 and its 8.125 percent notes due in October 2022, according to a regulatory filing Thursday.

The largest stakes in the notes are held by Franklin Resources Inc. and Neuberger Berman Europe Ltd.

Shares of SandRidge, which have fallen 81 percent in the past year amid a 42 percent drop in the price of oil, trade at $1.33. The company lost $1.03 billion in the first quarter.

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