Fitch Dwngrs Petroleum Geo-Services to 'C'; Placed on Watch Neg.Business Editors CHICAGO--(BUSINESS WIRE)--Jan. 7, 2003 Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has downgraded Petroleum Geo-Services Petroleum Geo-Services ASA (OSE: PGS, NYSE: PGS), an oilfield service company, provides geophysical services worldwide, and floating production services in the North Sea. ASA Asa (ā`sə), in the Bible, king of Judah, son and successor of Abijah. He was a good king, zealous in his extirpation of idols. When Baasha of Israel took Ramah (a few miles N of Jerusalem), Asa bought the help of Benhadad of Damascus and (PGO PGO Public Guardianship Office (UK) PGO Ponto-Geniculo Occipital (burst neurons) PGO Project on Government Oversight PGO Pass Grade Only (academics) ) senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. rating to 'C' from 'CCC' and downgraded PGO's trust preferred securities to 'C' from 'CCC-'. The ratings have been placed on Ratings Watch Negative. The downgrade of PGO's ratings is subsequent to the company's recent announcement that it will use the 30 day grace period for payment of interest due December 30, 2002 related to PGO's 6 5/8% senior notes due 2008 and its 7 1/8% senior notes due 2028. Failure to make such payment within the 30 day grace period will be considered to be an event of default, and the rating will be lowered to 'D'. Should the coupon payment default be cured in the grace period, a new rating will be assigned, but reflective of the just cured default. PGO also announced that it is deferring distribution payments on the preferred securities issued by its wholly owned trust subsidiary PGS PGS Pages PGS Petroleum Geo-Services PGS Planning Gain Supplement (UK land tax) PGS Parallel Giant Slalom (skiing and snowboarding competitions) PGS Plant Genetic Systems (Belgium) Trust I. The deferral deferral - Waiting for quiet on the Ethernet. is made in accordance with instrument covenants and the deferral period may extend for five years. Within this five year deferral period, Fitch Ratings does not consider nonpayment an event of default. Trust preferreds, however, are debt and therefore upon expiration of the deferral time period, nonpayment would result in a 'D' category rating. Similarly, upon a bankruptcy filing such ratings would go to 'D'. The ratings have been placed on Rating Watch Negative reflecting the probability of PGO not making the previously mentioned interest payment within the grace period, thereby resulting in default. PGO is a technologically focused oilfield service company principally involved in two businesses: geophysical seismic services and production services. PGO acquires, processes, manages and markets 3D, time-lapse and multicomponent seismic data. This data is used by oil and gas companies in exploration for new reserves, development of existing reservoirs and management of producing oil and gas fields. In its production services business PGO own and operates four FPSOs and operates numerous offshore production facilities for oil and gas companies to produce from offshore fields more cost effectively. |
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