S&P upgrades Gastar notes to CC

S&P said it raised the issue-level rating on Gastar Exploration Inc.'s senior secured notes to CC (one notch below the corporate credit rating) from C.

The agency revised the recovery rating on the company's senior secured notes to 5 from 6. The 5 recovery rating indicates an expectation of modest (10%-30%; higher half of the range) recovery in the event of default.

S&P said the revised recovery rating on the company's secured debt reflects that the company's borrowing base on its reserve-based loan facility was recently reduced to $100 million from $180 million following the sale of the company's Appalachian assets. As a result, the agency’s recovery analysis now indicates a greater recovery for the company's senior secured debt.

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