S&P rates Energy XXI notes B, cuts unit's debt

Standard & Poor's said it assigned its B issue rating to the proposed $300 million senior unsecured debt due 2024 to be issued by Energy XXI Gulf Coast Inc. The recovery rating on this debt is 5, indicating an expectation for modest recovery (10% to 30%) in the event of a payment default.

At the same time, S&P lowered the issue ratings on subsidiary Energy XXI Gulf Coast Inc.'s existing senior unsecured debt to B from B+ and removed them from CreditWatch, where S&P had placed them with negative implications on March 13.

S&P revised the recovery rating on the debt to 5 from 4, indicating an expectation for modest (10% to 30%) recovery in the event of a payment default.

S&P also affirmed the B+ corporate credit rating on Energy XXI (Bermuda) Ltd. and the B- issue-level rating on its convertible debt. The recovery rating on this debt remains 6, indicating an expectation for negligible (0%-10%) recovery in the event of a payment default.

The outlook is stable.

"Despite weaker credit measures attributed to higher debt levels used to fund the EPL acquisition, the stable outlook reflects our expectation that EXXI will prudently manage its capital spending in fiscal 2015, enabling the company to generate positive cash flow and reduce debt levels," said S&P credit analyst Mark Salierno in a news release.

© 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.