Moody's rates Crescent Resources loan Ba2

Moody's Investors Services said it assigned a Ba2 corporate family rating to Crescent Resources, LLC and a Ba2 rating to its new $1.425 billion bank credit facility, which consists of a $1.225 billion six-year term loan and a $200 million three-year revolving credit facility.

The outlook is stable.

Proceeds from the $1.225 billion term loan have been distributed to Duke Energy Corp. as part of the recapitalization of Crescent Resources following the formation of a joint venture between Duke Energy and Morgan Stanley Real Estate Fund. Crescent Resources was formerly a subsidiary of Duke Energy and is now controlled by the joint venture.

The agency said the ratings reflect Crescent Resource's collateral, track record, moderate leverage and coverage statistics, good liquidity, the strength and expertise of its management and the sponsorship by the company's owners.

The key risks are the high volatility of Crescent Resource's earnings stream, refinancing risk at the end of the bank loan's term, significant exposure to development risk, concentration in markets in the southeastern United States and development pipeline sourcing risk, Moody's said.

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