Moody’s rates Denbury notes B3

Moody’s Investors Service said it changed Denbury Resources Inc.'s probability of default rating to B3-PD/LD from B3-PD, affirmed its B3 corporate family rating and assigned a B3 rating to its new 7¾% secured second-lien notes due 2024.

The B3 ratings on the existing second-lien debt, the Caa2 ratings on the senior subordinated notes and the SGL-2 speculative grade liquidity rating were also affirmed.

The outlook remains stable.

Denbury issued $528 million of new 7¾% senior secured second-lien notes due 2024 and $245.5 million of 6.375% convertible senior notes due 2024 (as well as paid $120 million in cash) in exchange for $152 million of existing senior subordinated notes due 2021, $220 million of existing senior subordinated notes due 2022, $96 million of existing senior subordinated notes due 2023 and $425 million of existing 7½% senior secured second-lien notes due 2024.

Moody's said it considers Denbury's notes exchange that extended the maturity of the company's debt and exchanged debt for convertible debt as a distressed exchange, which is an event of default under Moody's definition of default.

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