August 29, 2016 Comments (0) Blog, Current Investigations, Publications

Update: Key Energy Services

(Last Updated On: April 6, 2017)

Have you suffered losses in Key Energy Services? If so, the securities attorneys of The White Law Group may be able to help you recover your losses with a FINRA arbitration claim against the brokerage firm that recommended the bonds to you.

Key Energy Services is a Houston, Texas based oilfield service company with operations in most major oil and natural gas producing basins in the continental US as well as in Mexico, South America, the Middle East, Russia, and Canada. The company issued debt to raise capital for its ventures, including the Key Energy Services, Inc. 6.75% 3/1/2021 bonds.

Unfortunately for investors, Key Energy Services plans to file for chapter 11 bankruptcy by Nov. 8, according to a regulatory filing. The restructuring plan, which must be approved by creditors, would give bondholders control of the company. Senior note holders would own about 95 percent of the reorganized company’s shares, according to the Securities & Exchange Commission filing. Private-equity firm Platinum Equity, which has agreed to support the plan, would be the largest shareholder. Current shareholders would lose almost all of their equity.

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 and investment adviser are required to make investment recommendations that are suitable for their clients in light of their clients particular investment situation – net worth, investment objectives, income, and investment experience.  Brokerage firms or advisors who sell junk bonds to unsuitable investors or fail to adequately disclose the risks of the investments can be held accountable for losses suffered through a FINRA arbitration claim.

For more information on The White Law Group’s investigation of Key Energy Services, click here.

If you have concerns regarding your investment in Key Energy Services, Inc. 6.75% 3/1/2021 bonds and would like to speak with a securities attorney about your litigation options, please call The White Law Group at 888-637-5510 for a free consultation.

The White Law Group, LLC is a national securities fraud, securities arbitration and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.

To learn more about The White Law Group visit www.whitesecuritieslaw.com.