Moody’s gives Eclipse CFR B3, notes Caa1

Moody's Investors Service said it assigned Eclipse Resources Corp. a B3 corporate family rating and a Caa1 rating to its proposed offering of $650 million of senior unsecured notes due 2023.

The agency also assigned a SGL-3 speculative grade liquidity rating to indicate adequate liquidity through 2016.

The outlook is stable.

Proceeds will be used to repay the company's existing pay-in-kind senior unsecured notes and to prefund capital expenditures.

"Despite Eclipse's prime acreage position in the southern Utica Shale and western Marcellus, improving operating performance and adequate liquidity, the company will face considerable funding and execution risk to achieve its longer term growth targets," Moody's assistant vice president and analyst Sajjad Alam said in a news release.

"Moody's believes that the company will outspend cash flow by over $400 million in 2015 and by another $300 million in 2016 in its quest to grow reserves and production. To finance this funding gap, the company will use proceeds from this note offering, but will also have to rely on increases to its borrowing base or other forms of external capital, especially if commodity prices weaken."

© 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.