Moody's rates Plains E&P notes B1

Moody's Investors Services said it assigned a B1 rating (LGD4, 69%) to Plains Exploration and Production's $400 million 10-year senior unsecured notes.

The agency affirmed the Ba3 corporate family and probability-of-default ratings, and B1 senior unsecured note ratings (LGD4, 69% from LGD5, 73%).

The outlook is stable.

Proceeds will be used to repay borrowing under the $1.9 billion secured borrowing base facility.

Ratings are supported by seasoned management, solid scale for a Ba3 rating, substantially reduced leverage and strong production trends, according to the agency.

Ratings are restrained by the unlikelihood of further leverage reductions, given PXP's shareholder buyback program, and expectation that organic reserve replacement costs will rise further, Moody's said.

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