Moody’s assigns Leviathan notes Ba3

Moody’s Investors Service said it assigned a Ba3 rating to $2.25 billion of proposed senior secured notes to be issued by Leviathan Bond Ltd.

Leviathan Bond is a special purpose vehicle and the notes are secured on Delek Drilling LP’s 45.34% working interest in the Leviathan gas project in Israeli waters and associated assets.

“The Ba3 rating reflects, as positives, the substantial gas reserves in the Leviathan gas reservoir, which had 1P proved reserves of 322.4 billion cubic meters as of June 30, 2020, and the minimal anticipated ongoing maintenance capital requirements to maintain stable production. It is the largest gas reserve in Israel (government of Israel, A1 stable) and an important contributor to the country’s energy security. Based on forecast production, the sponsor expects the field to have an operating life of over 30 years,” Moody’s said in a press release.

The outlook is stable. The agency forecasts Leviathan Bond will improve its financial metrics, especially its funds from operations to debt, Moody’s said.

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