S&P gives Antero Resources notes B

S&P said it assigned Antero Resources Corp.’s planned $500 million of unsecured notes a B rating with a 2 recovery rating.

Proceeds will be used to redeem $350 million of its $661 million of outstanding 2022 notes and repay some of the borrowings under its revolving credit facility. “We view the transaction as credit positive because it reduces Antero's near-term borrowings while increasing its liquidity due to the repayment of outstanding borrowings under its credit facility,” S&P said in a press release.

Concurrently, S&P affirmed Antero’s B- issuer rating and its B senior unsecured debt rating and revised the outlook to stable from negative.

“Our ratings and outlook on Antero are supported by its improving free cash flow profile. In April, the company announced it was reducing its capital expenditure (capex) and – more recently – indicated that it would undertake only about $580 million of maintenance capex in 2021, which will provide it with free cash flow of about $350 million-$400 million for the year. Antero has also hedged about 93% of its natural gas through 2021, which supports its ability to meet its stated free cash flow guidance and reduce its debt in the near term,” the agency said.

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