OREANDA-NEWS. February 23, 2016. Fitch Ratings says that the agency could downgrade its ratings on Pacific Exploration and Production Corp. (Pacific; Long-term Foreign and Local Currency Issuer Default Ratings of 'C') to restricted default (RD). This could occur after the expiration of the recently negotiated extension with bondholders of the time in which to declare principal due and payable on certain notes. Fitch considers the extension of multiple waivers or forbearance periods upon a payment default a restricted default given they represent a material reduction in terms compared with the original contractual terms. Furthermore, the extension of multiple waivers can be interpreted as a tool that is being conducted in order to avoid bankruptcy.

On Jan. 19, 2016, Pacific announced it had reached an agreement with a portion of the 2019 and 2025 noteholders to extend the period to deem principal amount due and payable until March 31 of this year. These notes had interest payments due on January 19, and January 26, 2016, respectively, with a 30-day grace period, which the company opted to use.

Fitch downgraded Pacific's FC and LC ratings, as well as those for all the company's senior unsecured notes, to 'C' from 'CCC' after the company's announcement on Jan. 14, 2016 that it elected not to make its scheduled interest payments on its 5.625% notes due Jan. 19, 2025 and its 5.375% notes due Jan. 26, 2019.