S&P lowers Denbury notes, rates new unsecureds BB-

Standard & Poor's said it affirmed the BB- corporate credit rating on Denbury Resources Inc. and revised the outlook to negative from stable.

The agency also said it lowered the senior subordinated debt ratings to B from BB- and revised the recovery rating on this debt to 6 from 4, reflecting 0 to 10% expected default recovery.

S&P also said it assigned a BB- rating to the company's proposed senior unsecured notes with a recovery rating of 3, reflecting 50% to 70% expected default recovery.

The rating on Denbury's senior secured bank credit facility remains at BB+ with a recovery rating of 1, reflecting 90% to 100% expected default recovery.

S&P said it believes the recently announced $650 million exchange offer represents an opportunistic, proactive refinancing of debt, S&P said, and not a distressed exchange.

The agency also said it does not expect a conventional default on the debt over the near- to medium-term without the refinancing, as Denbury has no material near-term debt maturities, ample availability under its bank credit facility and does not expect the company to outspend cash flow.

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