Moody's assigns Energy XXI notes B3

Moody's Investors Service said it assigned a B3 rating to Energy XXI Gulf Coast, Inc.'s (EXXI) proposed $300 million senior notes due 2024.

The company's other ratings and stable outlook were unchanged.

Net proceeds from the offering will be used to repay all debt outstanding under its secured revolving credit facility, and the remainder to fund a portion of the cash consideration for Energy XXI's pending $2.3 billion acquisition of EPL Oil & Gas, Inc. If the EPL acquisition is not consummated, Energy XXI likely will use all of the remaining net proceeds for capital spending.

"While this offering will provide some permanent financing for the pending EPL acquisition, Moody's expects EXXI to issue additional notes over the next 12 months to re-align its capital structure assuming the acquisition closes," Moody's vice president Amol Joshi said in a news release.

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