S&P rates new Exco notes B

Standard & Poor's said it assigned its B+ corporate credit rating to exploration and production company Exco Resources Inc. and assigned its B senior unsecured debt rating to Exco's proposed $300 million senior unsecured notes due 2011.

The outlook is stable.

S&P said the ratings on Exco reflect its aggressive debt leverage, high cost structure, and acquisitive growth strategy. These factors are offset by high drilling success rates, a significant hedging program to help ensure profitability, and a long reserve life.

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