S&P rates Alta Mesa unsecured debt B

S&P said it affirmed its B issuer credit rating on Alta Mesa Holdings LP and revised the outlook to negative from stable.

S&P also assigned a B issuer credit rating to parent company Alta Mesa Resources Inc.

In addition, the agency affirmed its B issue-level rating on Alta Mesa's senior unsecured debt. The recovery rating remains 4, reflecting an expectation for average (30% to 50%; rounded estimate: 40%) recovery of principal in the event of payment default.

“The negative outlook reflects our view that projected leverage will be weak for the rating over at least the next year and that the company could encounter liquidity challenges given limited headroom under credit facility maintenance covenants,” S&P said in a news release.

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