Willbros Group (WG) Ratings Placed on CreditWatch Negative by S&P

Standard & Poor's Ratings Services today placed its 'B-' corporate credit rating on Willbros Group (NYSE: WG) on CreditWatch with negative implications.

"The CreditWatch placement reflects the continued decline in the company's operating trends, as well as the need to address loan covenant compliance, cut costs, and make previously planned asset sales," said Standard & Poor's credit analyst Michael Durand.

The downturn in energy prices has hurt Willbros' industry, and we believe operating performance will weaken further in 2015. We continue to assess Willbros' management and governance as "weak" because of the company's weak internal controls, in our view. Willbros has had numerous restatements and delays in filings since 2004. Most recently, Willbros determined a material weakness existed at Dec. 31, 2014. The company has delayed filing its 2014 10-K annual report with the SEC.

We could lower the corporate credit rating if the company is not able to obtain amendments and waivers to its credit agreements in a timely manner. Alternatively, we could lower the rating if the terms of any amendment are unfavorable such that we believe Willbros' financial commitments are unsustainable in the long term, given weak business prospects in 2015.

We could affirm the rating if the company successfully negotiates an amendment with lenders, and if we believe there is sufficient cushion under the amendment, given the execution risk the company will likely face in 2015 with respect to operating performance, cost cutting, and previously planned asset sales.

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