Moody’s downgrades CHC Group following Chapter 11 bankruptcy filing
Credit ratings agency Moody’s has downgraded CHC Group’s probability of default rating to D-PD (definitive probability of default) from a more favourable Ca-PD rating.
The action follows CHC’s announcement that it, along with its wholly-owned subsidiary CHC Helicopter it has filed for voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the US Bankruptcy Court for the Northern District of Texas, to facilitate the restructuring of its balance sheet and fleet.
CHC’s and CHC Helicopter S.A.’s other ratings were unchanged. The outlook for the company remained negative. Moody’s said it would now withdraw all ratings for the company consistent with Moody’s practice for companies operating “under the purview of the bankruptcy courts wherein information flow typically becomes much more limited.”
The ratings rationale for the decision, according to Moody’s, is the result of the bankruptcy filing, announced yesterday (5 May). On 15 CHC elected to skip interest payments due on its senior secured notes due 2020, entering the 30-day grace period allowed under the notes indentures.
CHC Group is headquartered in Vancouver, British Columbia and is a significant provider of helicopter services to the global offshore exploration and production industry with operations in 30 countries.
The principal methodology used in this rating was Global Oilfield Services industry rating methodology published in December 2014.
Last Friday (29 April) a CHC Group supplied EC255 Super Puma crashed near Bergen, Norway with the loss of 13 lives. Sources close to Helicopter Investor revealed that the helicopter was worth $27.5 million.
Oil giant Shell has now suspended any flights organised through CHC Group in the Scandinavian country.