S&P: Sanchez unchanged after add-on

Standard & Poor's said the CCC+ senior unsecured rating on Sanchez Energy Corp. remains unchanged following news that Sanchez plans to add on $150 million to its existing $400 million senior unsecured notes due 2021.

The recovery rating on this debt is 5, indicating 10% to 30% expected default recovery.

The company's B- corporate credit rating and positive outlook are unaffected.

Sanchez intends to use proceeds from the add-on, as well as proceeds from a concurrent offering of 8 million shares of common stock, to fund the previously announced Wycross acquisition, help fund capital spending in 2013 and 2014 and for general corporate purposes.

The ratings reflect the company's vulnerable business risk, highly leveraged financial risk and adequate liquidity, S&P said.

The ratings also consider Sanchez's limited scale of operations, high percentage of proved undeveloped reserves, execution risk of its near-term growth plan and aggressive capital spending levels in 2013 and 2014, the agency said.

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