June 5, 2016 Comments (0) Blog, Current Investigations

Investor Alert: Gastar Exploration 8.625% 05/15/18

(Last Updated On: April 6, 2017)

Have you suffered losses investing in Gastar Exploration 8.625% 5/15/2018? If so, The White Law Group may be able to help.

According to their website, Gastar Exploration Inc. (NYSE MKT: GST) is a pure play Mid-Continent independent energy company engaged in the exploration, development and production of oil, condensate, natural gas and NGLs. Their principal business activities include the identification, acquisition, and subsequent exploration and development of oil and natural gas properties with an emphasis on unconventional reserves, such as shale resource plays.
In May, Moody’s Investors Service, downgraded the Corporate Family Rating of Gastar Exploration Inc to Caa3 from Caa1, the rating on its senior secured notes due 2018 to Caa3 from Caa2, and the speculative grade liquidity to SGL-4 from SGL-3. The rating outlook was changed from stable to negative based on the volatile commodity price environment which will result in weakened cash flow metrics and tightened liquidity in 2016 and 2017, according to Moody Investor Services.

Sierra Income Corp, a non-traded BDC that The White Law Group has been investigating for some time, has invested a portion of their portfolio in Gastar Exploration. For more information on Sierra Income Corporation, click here.

High-yield bonds—also called non-investment-grade bonds, speculative-grade bonds, or junk bonds—are bonds that are rated below investment grade, typically ‘BB’ or lower by Standard & Poor’s and ‘Ba’ or lower by Moody’s. They pay high yields to bondholders because the borrowers credit ratings are less than pristine, making it difficult for them to acquire capital at an inexpensive cost. Junk bonds carry an above average risk that the issuer will default on the bond. The increased risk makes them arguably unsuitable for many investors.

Brokerage firms that sell such products are required to perform adequate due diligence on the investments to ensure a reasonable likelihood of success, and to evaluate whether the investments are suitable in light of the client’s age, net worth, investment experience, and investment objectives. Firms that fail to perform adequate due diligence, or that make unsuitable recommendations, can be held responsible for losses in a FINRA arbitration claim.

If you suffered losses investing in Gastar Exploration bonds and would like a free consultation with a securities attorney, please call The White Law Group at 888-637-5510.

The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida. For more information on The White Law Group, please visit www.whitesecuritieslaw.com.