Moody's rates CrownRock notes Caa1

Moody's Investors Service said it assigned a Caa1 (LGD4) rating to CrownRock, LP's $300 million senior notes due 2023. All other ratings of CrownRock remain unchanged. The outlook is stable.

"This senior notes offering will allow CrownRock to term out its revolver borrowings, put cash on the balance sheet to fund 2015 capex and improve liquidity,” Arvinder Saluja, Moody's vice president, said in an agency news release.

The agency said CrownRock's B3 corporate family rating reflects the company’s modest but improving scale, large percentage of oil production, good margins given a generally favorable hedging profile and management's track record of growing reserves and production in the Permian Basin.

The rating also considers the company’s somewhat high leverage, especially debt to average daily production at $35,000/boe, the agency said. Moody’s expects an improvement in leverage as CrownRock continues to grow its scale.

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