OREANDA-NEWS. S&P Global Ratings today lowered its corporate credit rating on U. S.-based oilfield services company Forbes Energy Services Ltd. to 'D' from 'CCC-'.

At the same time, we lowered our issue-level rating on the company's unsecured debt to 'D' from 'CCC-'. The recovery rating remains '4', indicating our expectation of average (30% to 50%, upper half of the range) recovery in the event of a payment default.

"The downgrade reflects our view that Forbes Energy's decision to skip its interest payment on its 9% senior notes due 2019 and enter into forbearance agreements with holders of its 9% senior notes and its credit facility will lead to a default," said S&P Global Ratings credit analyst Michael Tsai.

Despite ongoing negotiations with creditors, we do not expect the company will make the interest payment within the next 30 days and believe restructuring under a Chapter 11 bankruptcy is the most likely outcome.