OREANDA-NEWS. S&P Global Ratings today lowered its corporate credit rating on Vanguard Natural Resources LLC to 'SD' from 'CC'. We also lowered the issue-level rating on the company's senior unsecured notes to 'D' from 'CC'. The recovery rating is '5', indicating our expectation of modest (10% to 30%, high end of the range) recovery in the event of default.

Vanguard Natural Resources has completed the exchange of its 7.875% senior unsecured notes due April 1, 2020, with certain note holders for 7% secured second-lien notes due 2023 at less than par. We view this as a distressed exchange as existing holders received less than the original promised amount, the interest rate on the new securities is lower than the original yield, and the new securities' maturity extends beyond the original.

We expect to return the corporate credit rating to the 'CCC' category.