Moody's rates Fieldwood loans Ba2, B2

Moody's Investors Service said it assigned Fieldwood Energy LLC a B1 corporate family rating, a Ba2 rating to the proposed $900 million first-lien term loan, a B2 rating to the proposed $1.7 billion second-lien term loan and a SGL-2 speculative grade liquidity rating.

The outlook is stable.

Net proceeds from the senior secured credit facilities, along with $100 million in drawings under the revolving credit facility and equity investment by Riverstone Holdings LLC, will be used to finance its acquisition of Apache Corp.'s shallow Gulf of Mexico (GoM) assets for about $3.75 billion (excluding $1.5 billion of assumed plugging and abandonment (P&A) liabilities).

"While Fieldwood has the largest asset base of any pure play GoM operator, geographic concentration in and risks of operating offshore constrain its ratings," Moody's vice president Saulat Sultan said in a news release.

"There is also limited opportunity for credit accretion through early 2015 due to significant P&A related funding obligations."

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