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S&P Global Ratings downgraded Kosmos Energy Ltd (NYSE:KOS). to ’CCC+’ from ’B’ on Monday, citing rising liquidity pressure and refinancing risk for the Dallas-based oil and gas exploration company.
The downgrade reflects weaker-than-expected first-quarter performance and S&P’s view that Kosmos’ capital structure is unsustainable under current commodity price assumptions of $60 per barrel Brent oil for the remainder of 2025. The rating agency also lowered its issue-level rating on Kosmos’ unsecured debt to ’ CCC (WA:CCCP)’ from ’B’ and revised the recovery rating to ’5’ from ’4’.
Kosmos faces a significant debt maturity schedule over the next three years, including $250 million in senior notes due April 2026, $350 million due May 2027, and $400 million due 2028. The company also had $1 billion drawn on its $1.35 billion reserve-based lending facility as of March 31, 2025, with total liquidity of $400 million.
S&P revised its assessment of Kosmos’ liquidity to less than adequate from adequate, noting the company lacks sufficient cash flow generation to address upcoming maturities without refinancing. The rating agency also warned that Kosmos risks breaching its reserve-based lending maintenance covenant during 2025.
The negative outlook reflects the possibility of further downgrades if Kosmos fails to refinance its near-term maturities or if its liquidity deteriorates further, though S&P does not anticipate a default in the next 12 months.
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