Moody’s assigns B1 to WPX notes

Moody’s Investors Service said it assigned B1 ratings to WPX Energy, Inc.’s proposed two tranches of senior unsecured notes totaling $900 million. The proceeds will be used to finance a portion of the cash consideration for the acquisition of Felix Energy Holdings II, LLC. WPX’s ratings including the Ba3 corporate family rating and B1 ratings on senior unsecured notes are unchanged. The existing ratings and ratings on the proposed notes are on review for upgrade.

Moody’s expects to conclude the ratings review following the closing of the Felix Energy acquisition, which is anticipated to occur in the second quarter 2020. The CFR and ratings on the existing notes could be upgraded by one notch at the conclusion of the review, based on the announced terms of the acquisition, resulting in a Ba2 CFR and Ba3 ratings on the senior unsecured notes. The transaction is subject to regulatory approval and the approval of WPX shareholders.

“The Felix Energy acquisition is credit positive for WPX Energy, increasing its scale and cash flows,” said James Wilkins, a Moody’s vice president, in a press release. “The company’s leverage will not change materially as a result of the significant equity funding of the acquisition purchase price.”

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