S&P Cuts Rating on American Eagle Energy (AMZG) to 'D'; Notes Missed Interest Payment

• U.S. oil and gas exploration and production (E&P) company American Eagle Energy Corp. missed the interest payment due March 2, 2015, on its 2019 senior secured notes.
• We are lowering our corporate credit and issue-level ratings to 'D' from 'CCC+'.
• The recovery rating on the notes remains '4'.

Standard & Poor's Ratings Services today lowered its corporate credit and issue-level ratings on American Eagle Energy (AMEX: AMZG) to 'D' from 'CCC+'. The recovery rating on the notes remains '4', indicating our expectation for average (upper half of the 30% to 50% range) recovery in the event of a payment default.

"We lowered the rating after American Eagle missed an interest payment for $9.8 million due March 2, 2015, on its $175 million senior secured notes due 2019," said Standard & Poor's credit analyst Christine Besset.

The company has entered into a 30-day grace period during which it could make the interest payment. The company is currently evaluating options to strengthen its balance sheet and intends to use the grace period to determine whether to make the interest payment. We believe there is a low probability that the company will make the payment during this period given its strained liquidity position.

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