S&P Downgrades Memorial Production Partners (MEMP) to 'D'

S&P Global Ratings today lowered its corporate credit ratings on Memorial Production Partners L.P. (Nasdaq: MEMP) to 'D' from 'CC'.

In addition, we lowered our senior unsecured issue-level rating to 'D' from 'C'. The recovery rating on this debt is '6', indicating our expectation of negligible (0%-10%) recovery for creditors in the event of a payment default.

"The downgrade reflects MEMP's failure to make the coupon payment due under its 2021 notes within the 30-day grace period, and our belief that the partnership will likely elect not to meet its financial obligations until it has agreed on a financial restructuring plan with them," said S&P Global Ratings credit analyst Christine Besset.

MEMP entered into a forbearance agreement through today Dec. 7, 2016, with certain holders of the notes. In addition, the partnership reached an agreement with the lenders under its revolving credit facility to extend through Dec. 16, 2016, the waiver previously granted in connection with MEMP's missed coupon payment on the notes. We note that MEMP's operations are continuing as normal across the partnership's asset base while discussions with lenders are ongoing.

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