Moody's lowers EXCO to B2

Moody's Investors Service said it downgraded EXCO Resources, Inc.'s ratings, moving its corporate family rating to B2 from B1 and its senior unsecured note rating to B3 from B2.

The outlook is stable.

Moody's said this concludes a review for downgrade begun Aug. 29, 2005 when, after having sold its Canadian reserves for a peak price and continuing its ongoing evaluation of strategic alternatives, EXCO formally announced a long series of strategic moves that Moody's expected to wind up in the B2 or B1 corporate family rating range.

EXCO continues to evaluate frequent acquisition packages and the formation of a master limited partnership with certain of its reserves. Now that EXCO has presented its actual and pro-forma reserve data and first-quarter 2006 numbers, it is clear that it will remain much too leveraged and much too active to warrant a B1 corporate family rating, the agency said.

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