Moody's: Denbury view stable

Moody's Investors Service said it changed Denbury Resources, Inc.'s outlook to stable from negative.

The agency also said it affirmed its Ba3 corporate family rating, Ba3 probability of default rating and the B1 rating on the existing senior subordinated notes with LGD point estimate to 70% from 73%.

Moody's also said it assigned a B1 (LGD 5, 70%) rating to the company's proposed $350 million senior subordinated notes offering.

The proceeds will be used to fund the tender of the company's $225 million senior subordinated notes due 2013 and the $300 million senior subordinated notes due 2015.

The move to a stable outlook reflects Denbury's progress in reducing debt and leverage on its proven developed reserves, which had been elevated after completing its acquisition of Encore in 2010, Moody's said.

Although leverage is still high for the rating, the company said it has made meaningful strides in reducing its debt over the past 12 months and this trend is expected to continue through 2011, the agency said.

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