Moody's rates W&T notes Caa1

Moody's Investors Service said it assigned a Caa1 rating to W&T Offshore's proposed $600 million of senior notes due 2019.

The outlook is stable.

Net proceeds from the notes will be used to fund a tender offer for their existing $450 million of senior notes due 2014 and to reduce credit facility borrowings.

The transaction will improve W&T's liquidity profile by extending the maturity of their notes from 2014 to 2019 and increasing availability under the credit facility, the agency said.

The ratings reflect the company's relatively small scale and concentration in the offshore Gulf of Mexico, its good diversification within the Gulf of Mexico and the high decline rates, capital intensity and operational challenges inherent in the Gulf of Mexico including risks of hurricane damage to drilling platforms and pipeline transportation infrastructure, the agency said.

The rating also considers W&T's 27 years of operating experience in the area, the agency said.

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