S&P lifts Resolute Energy second-lien loan to CCC-

Standard & Poor’s said it affirmed the CCC- corporate credit rating on Resolute Energy Corp.

The agency also said it raised the rating on the company’s second-lien term loan to CCC- from CC and revised the recovery rating on this loan to 3 from 5.

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

S&P also said it affirmed the C rating on the company’s senior unsecured notes. The recovery rating on these notes remains at 6, indicating 0 to 10% expected default recovery.

The outlook is negative.

The upgrade on the second-lien term loan rating reflects the reduced level of expected first-lien lien debt at default following the reduction of the borrowing base on the company’s credit facility, S&P explained.

In addition, the agency said it revised the assessment of liquidity to less-than-adequate from adequate, reflecting the impact of lower expected borrowing capacity on the company’s credit facility.

The negative outlook reflects the potential for a downgrade if the company announces a debt exchange viewed as distressed, S&P said, or if liquidity further deteriorates.

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