U.S.-based oil and gas exploration and production company Northern Oil and Gas Inc. has entered into an agreement to exchange a portion of its 8% senior unsecured notes due 2020 for a combination of new second-lien notes due 2023 and equity. Although the exchange offer is at nominal par value, we believe debtholders are getting less than the original promise on the securities. In addition, we view the offer as distressed, rather than opportunistic given the company's unsustainable leverage prior to the transaction. We are lowering our corporate credit rating on Northern Oil and Gas to 'CC' from 'CCC+' and our issue-level rating on the company's unsecured debt to 'CC' form 'CCC+'. The rating outlook is negative reflecting the expectation
