S&P changes Denbury to positive

S&P said it affirmed its CCC+ long-term corporate credit rating on Denbury Resources Inc. and revised the outlook to positive from stable.

The agency also affirmed the B issue-level ratings on Denbury's senior secured revolving credit facility and senior secured second-lien notes. The recovery rating on the notes is 1, indicating very high (90%-100%; rounded estimate: 95%) recovery in the event of a payment default.

S&P also affirmed its CCC- rating on Denbury's subordinated debt. The recovery rating is 6, indicating an expectation of negligible (0%-10%; rounded estimate: 5%) recovery.

The agency said the revision follows the conversion of about $144 million of convertible senior unsecured notes into equity in the past two months.

“The positive outlook reflects the likelihood of an upgrade if the company is able to extend the maturity of its revolving credit facility and our belief that the likelihood of further debt exchanges is very low,” S&P said in a news release.

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