S&P: Resolute Energy loan B-

Standard & Poor’s said it assigned a B- rating and 3 recovery rating to Resolute Energy Corp.’s $150 million second-lien secured term loan.

The loan matures six months following the maturity date of the company’s first-lien revolving credit facility.

The 3 recovery rating indicates 50% to 70% expected default recovery.

The proceeds of $134 million will be used to repay a portion of the borrowings on its revolving credit facility.

The company’s credit facility also was amended to reduce the borrowing base to $330 million from $400 million previously and to eliminate the total debt-to-EBITDA covenant, S&P said.

The terms of the term loan facility allow Resolute Energy to issue up to $200 million of additional term loan debt for 60 days following the closing, the agency said.

If the company were to increase term loan borrowings, it could affect the recovery rating on this debt, S&P said, and the issue-level rating.

The company’s B- corporate credit rating reflects the company’s vulnerable business risk and highly leveraged financial risk, as well as its adequate liquidity, the agency said.

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