On May 3, 2017, S&P Global Ratings lowered its corporate credit rating on Permian Resources LLC to SD from CCC and its second-lien secured and unsecured debt ratings to D from CC. “The downgrade follows Permian Resources’ announcement that it has agreed to exchange approximately $325 million of principal amount of the company’s second-lien secured debt and unsecured debt for equity interests,” said S&P Global Ratings credit analyst Alexander Vargas. S&P views this transaction as distressed. The reason S&P views this transaction as distressed is because the ranking of the equity in the capital structure would be considered more junior to the original debt. Permian Resources also entered into a series of definitive agreements with certain funds and other investors that will provide the Company with $744 million in equity financing. Read more on distressed companies.
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