New York, October 04, 2016 -- Moody's Investors Service, ("Moody's") downgraded American Gilsonite Holding Company's Corporate Family Rating (CFR) to Ca and its Probability of Default Rating to Ca--PD/LD from Caa2 and Caa2-PD, following the expiration of its grace period as of October 1, 2016 for a missed interest payment. Adding the /LD (limited default) indicator results from American Gilsonite's missed interest payment of $15.5 million due September 1, 2016 and from the understanding that the company has entered into forbearance agreements with lenders. The agreement provides forbearance against certain events of default until October 24, 2016 in order for American Gilsonite to determine various restructuring alternatives with lenders that would result in a viable path forward. The LD indicator will remain in place until there is a resolution to the missed interest payment. The downgrade of American Gilsonite's Corporate Family Rating to Ca results from its election to miss the first quarter interest payment on the 11.5% notes, the near-term maturity of the notes due September 2017, the compromised earnings of the business due to low oil prices, and that the capital structure is unsustainable. The rating on American Gilsonite's $270 million 11.5% senior secured first notes due September 2017 was downgraded to Ca from Caa2, given Moody's view that significant impairment is likely. American Gilsonite also has an unrated $25 million first lien revolving credit facility is due in May 28, 2017 which is believed to be in a preferential security position to the notes. The rating outlook is stable.

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