Moody's rates Rosetta notes B2

Moody's Investors Service said it assigned a B2 rating to Rosetta Resources Inc.'s proposed $700 million of senior notes, upgraded the existing senior notes to B2 (LGD5, 75%) from B3 (LGD5, 89%), changed the speculative grade liquidity rating to SGL-2 from SGL-3 and affirmed the B1 corporate family rating and B1-PD probability of default rating. The outlook remains positive.

Proceeds, along with a $300 million equity issue, will be used to help fund the company's recent Permian acquisition and to pay down borrowings under its revolving credit facility.

The notes' B2 rating is based on the amount of the company's secured versus unsecured debt, and the agency said the upgrade relies on its expectation that Rosetta does not draw a substantial amount under its $800 million senior secured revolving credit facility due 2018, which could potentially result in a downgrade of the notes.

Rosetta's SGL-2 speculative grade liquidity rating reflects good liquidity through mid-2014 with $66 million of cash as of Dec. 31 and full availability under the revolver pro forma for the paydown, Moody's said.

The positive outlook reflects Moody's expectation that Rosetta will successfully integrate the assets acquired and will continue to grow its reserves and production on a sustainable basis while maintaining its conservative financial profile.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.