2008-07-23 22:51:02 -
- Fitch Ratings has downgraded the ratings of SemGroup, L.P. (SemGroup), SemCrude L.P., and SemCAMS Midstream Co. and simultaneously withdrawn all ratings. Ratings affected by this action are:
The following ratings are being withdrawn:
SemGroup, L.P.
SemCrude, L.P.
SemCAMS Midstream Co.
--Issuer default Rating D
Fitch Ratings has downgraded, removed from Rating Watch Negative,
and simultaneously withdrawn the following:
SemGroup, L.P.
--Senior unsecured to 'C' from 'B/RR3'.
SemCrude L.P.
--Senior secured working capital facility to 'CCC' from 'BB-/RR1';
--Senior secured revolving credit facility to 'CC' from 'B+/RR1';
--Senior secured term loan B to 'CC' from 'B+/RR1'.
SemCAMS Midstream Co. (SemCAMS)
--Senior secured working capital facility to 'CCC' from 'BB-/RR1';
--Senior secured revolving credit facility to 'CC' from 'B+/RR1';
--Senior secured term loan B to 'CC' from 'B+/RR1'.
On July 22, 2008, SemGroup, L.P. and its major domestic wholly-owned subsidiaries filed a petition for bankruptcy under Chapter 11 reflecting severe liquidity strains following a spike in crude oil prices. The company is seeking buyers for its assets and does not appear likely to emerge from bankruptcy. Additional news disseminated from the company and media reports highlight large losses in trading positions which have subsequently been closed, sold, or transferred to other parties as well as previously undisclosed exposures to an affiliate of the company's co-founder and former chief executive officer. At this time, Fitch is unable to evaluate, with any precision, estimated recovery levels on the various facilities and instruments in the capital structure. Consequently, no recovery ratings are assigned. To date, the company has not obtained debtor-in-possession financing, restricting ongoing business activities and impairing realizable asset values from potential sales. Bank facility and debt instrument ratings reflect their relative ranking in the capital structure and/or their collateral position. Fitch believes recovery prospects for the SemGroup L.P. senior unsecured noteholders are extremely poor. A protracted bankruptcy proceeding appears likely.
SemGroup is a privately held midstream energy partnership focused primarily on providing gathering, transportation, processing, and marketing services for crude oil and refined products in the U.S. Midcontinent region and Canada. Additionally, through its SemMaterials subsidiary, SemGroup stores, transports and markets asphalt and asphalt products in the United States and Mexico.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
Fitch Ratings
Joseph Sorce, +1-312-368-3161 (Chicago)
Glen Grabelsky, +1-212-908-0577 (New York)
Brian Bertsch, +1-212-908-0549
(Media Relations, New York)
