Moody's lowers Chaparral

Moody's Investors Service said it downgraded the ratings of Chaparral Energy, Inc., concluding the ratings review initiated in September following Chaparral's announced acquisition of Calumet Oil Co. and certain affiliates.

Ratings downgraded include Chaparral's corporate family and probability of default ratings, both to B3 from B2 and Chaparral's existing 8.5% sr. notes due 2015 to Caa1 (LGD 5, 75%) from B3 (LGD 4, 69%), the agency said.

Moody's said it also assigned a Caa1 rating (LGD 5, 75%) to Chaparral's proposed offering of $275 million of senior notes due 2017.

Proceeds from the note offering will be used to repay credit facility borrowings, the agency added.

The outlook is stable.

The downgrade reflects the significant increase in leverage resulting from the Calumet acquisition, Moody's said, adding it continues to believe that the acquired properties are a good fit for Chaparral geographically and in terms of opportunities for enhanced recovery, however, by not issuing any additional common equity in connection with the transaction, Chaparral's leverage is high.

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