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S&P rates Energy XXI notes B+
Standard & Poor's said it assigned its B+ issue-level rating to Energy XXI Gulf Coast Inc.'s $500 million 7½% senior unsecured notes due December 2021 with a recovery rating of 4.
At the same time, the agency revised its recovery rating on the company's senior unsecured debt to 4 from 3. The 4 recovery rating reflects an expectation that creditors would receive average (30% to 50%) recovery in the event of a payment default.
The issue-level rating on Energy XXI's existing unsecured debt remains B+, the same as the corporate credit rating. Energy XXI plans to use the proceeds from the note issuance to repay existing debt outstanding under its revolving credit facility.
The B+ corporate credit rating and stable outlook on Energy XXI (Bermuda) Ltd. also remain unchanged.
S&P said the lower recovery expectation on Energy XXI's existing notes reflects its expectation for weaker recovery prospects for unsecured noteholders following the incremental debt issuance.
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