S&P rates Encore Acquisition notes B

Standard & Poor's said it affirmed its B subordinated debt ratings and BB- corporate credit rating on Encore Acquisition Co.

At the same time, the agency said it assigned its B rating to the company's proposed $300 million 6% senior subordinated notes due 2015.

Proceeds from the note offering will be used to refinance its existing $150 million 8.375% senior subordinated notes due 2012, as well as to repay existing bank borrowings under the company's $750 million credit facility.

The outlook is stable.

The rating affirmation reflects S&P's expectations that Encore should be able to fund its aggressive organic growth spending in 2005, increase its production levels and replace its reserves primarily through internally generated cash flow while also maintaining the appropriate financial profile and liquidity for the current ratings, the agency said.

The ratings on Encore reflect its small to midsize reserve base of 173 million barrels of oil equivalent, which is 77% oil, modest geographic diversification and an aggressive growth strategy, S&P said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.