Moody's cuts Venoco CFR, rates Denver Parent notes Caa3

Moody's Investors Service said it downgraded Venoco, Inc.'s corporate family rating to Caa1 from B3 and moved the rating to Denver Parent Corp.

At the same time, Moody's assigned a Caa3 rating on Denver Parent's proposed $250 million senior PIK toggle notes due 2018 with a stable outlook.

Moody's also affirmed Venoco's Caa1 unsecured notes rating. The stable outlook was maintained.

Proceeds from the proposed notes offering will be used to repay $65 million outstanding notes at DPC and will be contributed to Venoco to tender for its outstanding $150 million 11½% senior notes due 2017.

"DPC's Caa1 CFR is reflective of Venoco's small scale production and reserves compared to higher rated E&P companies, high leverage in terms of proved developed reserves and average daily production volumes, and the company's limited financial flexibility," Moody's vice president and senior analyst Michael Somogyi said in a news release.

"As a holding company, Denver Parent Corporation has no business operations or assets other than the capital stock of Venoco and is solely reliant on distributions from Venoco to service its debt obligations."

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.