S&P rates Comstock notes B

Standard & Poor's said it assigned a B rating to Comstock Resources' proposed $250 million senior unsecured note offering.

A recovery rating of 6 also was assigned, indicating 0% to 10% recovery in a default.

The outlook is stable.

The proceeds will be used to retire its $172 million of senior unsecured notes due March 1, 2012, S&P said, and to pay down borrowings under its credit facility.

The ratings reflect an expectation that natural gas prices will remain weak, which will pressure the company's profitability, the agency said.

The ratings also consider the company's small and geographically concentrated reserve base, S&P said, and the capital-intensive and cyclical nature of the exploration and production industry.

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