Ratings Agency, Fitch has downgraded Afen to C from B- indicating that a default on their debt is imminent
Just five days ago, Fitch downgraded Afren to B- sighting a risk that they might not be able to meet up their immediate financial obligations
The rating action follows Afren’s announcement that the company Board is now considering utilising a 30-day grace period under its 2016 bonds with respect to USD15m of interest due on 1 February 2015.
This latest announcement comes after the company earlier confirmed that it is seeking a deferral of a USD50m amortisation payment due at the end of January 2015.
At 31 December 2014 Afren reported that it had a cash balance of approximately USD235m. The company has now confirmed that actual liquidity available is significantly lower than cash on balance sheet as a result of restricted and segregated cash balances in place to address operational requirements.
The rating actions are as follows: Long-term IDR: downgraded to ‘C’ from ‘B-/RWN’; off RWN Senior secured bonds: downgraded to ‘C’/’RR6’ from ‘B-‘/’RR4/RWN’; off RWN Senior unsecured rating: ‘B-/RWN’ rating withdrawn
