Fitch puts Diamondback on watch

Fitch Ratings said it placed the BBB long-term issuer default ratings and unsecured ratings of Diamondback Energy, Inc., Diamondback O&G LLC and Energen Corp. on rating watch negative following the announcement to acquire QEP Resources, Inc. and Guidon Energy.

“The rating watch negative reflects the leveraging transactions and assumption of QEP's debt, which increases pro forma, post-close leverage metrics, heightens near-term refinance and liquidity risks, and increases execution risk. Management intends to prioritize FCF towards gross debt reduction to strengthen its post-close leverage profile, as well as reduce liquidity and refinance risks,” Fitch said in a press release.

The agency said it plans to resolve the rating watch upon close of the transactions, which is currently expected in the first quarter of 2021.

“Fitch currently expects Diamondback to maintain its investment-grade credit profile,” the agency said.

© 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.