Fitch assigns Ascent Resources B

Fitch Ratings said it assigned a long-term issuer default rating of B to Ascent Resources Utica Holdings, LLC. Fitch also assigned a BB/RR1 rating to Ascent’s first-lien senior secured revolver, a BB-/RR2 rating to its second-lien secured loan and a B/RR4 rating to its senior unsecured notes. Ascent’s exchange offer for its 10% notes due 2022 expired Thursday.

“Ascent’s rating reflects the successful execution of the debt exchange, which pushes the next material debt maturity to 2024, the expectation of strong FCF over the rating horizon with proceeds being applied to reduce debt, moderate leverage, average production scale, and a robust hedge book that mitigates downside risk,” Fitch said in a press release.

However, low liquidity offsets these factors, the agency noted. Ascent currently uses 73% of its $1.85 billion revolver.

The outlook is stable. “The stable outlook reflects the new capital structure that provides an extended runway for debt maturities and the stabilization of the company’s production base, which materially reduces capital spending commitments,” Fitch said.

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