S&P lowers Endeavor to B after add-on

Standard & Poor's said it lowered the senior unsecured debt rating on Endeavor Energy Resources LP to B from B+.

The agency also said it revised the recovery rating on this debt to 5, indicating 10% to 30% expected default recovery, from 4.

The revised recovery rating follows Endeavor's $250 million add-on issuance to its senior unsecured notes, which will result in lower recovery expectations for its unsecured debt in a default scenario, S&P said.

The ratings reflect the company's modest, proven reserve base and substantial acreage position concentrated in the Permian Basin of West Texas and a relatively high cost structure, the agency said.

The ratings also consider the company's capital spending, which is expected to exceed cash flow by a modest amount, S&P said.

The ratings also take into account the company's weak business risk profile and aggressive financial risk profile, the agency added.

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