Moody's may lower some EXCO ratings

Moody's Investors Service said it placed EXCO Resources Inc.'s B1 corporate family rating and its B2 senior unsecured note ratings under review for downgrade.

EXCO has carried a developing rating outlook since first-quarter 2005 due to its ongoing evaluations of several possible strategic actions.

Moody's said the review for downgrade is due to EXCO's announcement that the board of directors of its parent, EXCO Holdings Inc., has approved Holdings' initiation of formal negotiations with EXCO Holdings II, Inc. to conduct an initially leveraged buyout of all Holdings' equity shareholders.

Moody's said it believes that the initial outcome of the review for downgrade is likely to take one of the following directions before the likelihood and dimensions of a possible initial public offering can come clearly into view. Initially, either (1) both the corporate family rating and the note ratings may be downgraded, (2) the corporate family rating could be downgraded but the note rating confirmed or, (3) both the corporate family rating and note rating could be confirmed.

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