S&P rates RAAM notes B-

Standard & Poor's said it assigned a B- corporate credit rating to RAAM Global Energy Co., along with a B- rating on its proposed $200 million senior unsecured notes due 2015 offering. The recovery rating is 3, indicating 50% to 70% recovery in a default.

The company plans to use the proceeds to repay all of the debt outstanding under the revolving facility and for future capital expenditure plans.

The outlook is stable.

The ratings reflect the company's limited and small reserve base and low production, short reserve life, meaningful exposure to low natural gas prices and concerns about the winding down of a high-priced hedge position, S&P said.

The ratings are based on the company's position as an exploration and production company operating in the Gulf of Mexico and in a highly cyclical, capital-intensive and competitive industry, the agency said.

The ratings also consider the company's low leverage and adequate liquidity, S&P added.

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