Fitch rates Diamondback notes BBB

Fitch Ratings said it assigned BBB ratings to Diamondback Energy, Inc.'s planned series of senior unsecured notes with varying maturities and placed the notes on ratings watch positive.

The ratings align with those on Diamondback’s outstanding senior unsecured notes.

The RWP follows Diamondback's agreement to merge with Endeavor Energy Resources, LP in a nearly 70% stock-funded transaction valued at about $26 billion, inclusive of Endeavor's net debt. The about $8 billion cash portion is expected to be funded through a combination of the proposed senior notes, cash on hand, borrowings under the company's credit facility and/or proceeds from term loans.

The company plans to use the proceeds to pay a portion of the cash consideration for the Endeavor Energy Resources merger and for general corporate purposes.

The agency said it aims to resolve the positive watch upon closing of the transaction, which is currently expected in 2Q24 subject to customary closing conditions. Fitch recognizes the transaction’s closing and resolution of the RWP could take longer than six months.

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