Moody's rates Denbury notes B1

Moody's Investors Service said it assigned a B1 (LGD4, 69%) rating to Denbury Resources, Inc.'s new senior subordinated notes and affirmed the company's Ba3 corporate family and probability-of-default rating, affirmed the B1 (LGD4) rating on its existing notes and changed the loss-given-default rate on the existing notes to 69% from 67%.

The outlook remains stable.

The agency said the affirmation reflects the company's success to date of the execution of its strategy to become a predominantly tertiary recovery oil producer and the company's ability to maintain good margins and returns despite pursuing an inherently higher operating cost productive base.

However, the Ba3 rating also reflects Moody's expectation that the company's margins and returns will come under some pressure as the higher-cost carbon dioxide flooding operations will take a little time to rebalance in response to the fall in commodity prices.

© 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.