Moody's rates RAAM Global notes Caa2

Moody's Investors Service said it assigned to RAAM Global Energy Co. a Caa1 corporate family rating and Caa1 probability of default rating, along with a Caa2 (LGD 4, 64%) rating on its senior unsecured notes.

The outlook is stable.

The proceeds from the new notes offering will be used to repay borrowings under its existing revolving credit facility and to partially fund development and drilling activities, Moody's said.

The ratings reflect RAAM's small scale, high concentration risk and capital intensity of its property portfolio combined with significantly higher leverage, the agency said.

The ratings also consider the company's aggressive capital spending plan that is focused on complex geology, Moody's added.

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