The following is a press release from Standard & Poor's:
-- Standard & Poor's Ratings Services completed a review of Penn Virginia
Corp. and expects the company's financial and profitability measures to
-- We are lowering the corporate credit rating on Penn Virginia Corp. to
'B' from 'B+'.
-- We are lowering the senior unsecured ratings to 'CCC+' from 'B-'. The
recovery rating remains '6'.
-- The outlook is stable.
NEW YORK (Standard & Poor's) May 28, 2015--Standard & Poor's Ratings Services
today lowered the corporate credit rating on Radnor, Pa.-based exploration and
production (E&P) company Penn Virginia Corp. to 'B' from 'B+'. The outlook is
At the same time, we lowered our ratings on the company's senior unsecured
debt to 'CCC+' from 'B'. The recovery rating on the debt remains '6', which
indicates our expectation for negligible (0% to 10%) recovery in the event of
"The downgrade reflects the impact of weakening commodity price assumptions,
which resulted in a deterioration of Penn Virginia's expected financial and
profitability measures," said Standard & Poor's credit analyst David Lagasse.
Under Standard & Poor's assumptions, we now expect debt to EBITDA to exceed 5x
on average, consistent with a "highly leveraged" financial risk profile, as
defined by our criteria. Additionally, profitability measures are decreasing
and are approaching a "below average" assessment. Nevertheless, profitability
measures reflect historical drilling costs, which were based on very tight rig
and completion equipment market. We base our assessment of Penn Virginia's
"weak" business risk on its participation in the cyclical and
capital-intensive E&P industry and the relatively modest size of the company's
reserves. Based on resulting financial measures, we assess Penn Virginia's
financial risk prof