Moody's rates KCS Energy add-on B3

Moody's Investors Service said it assigned a B3 rating to KCS Energy Inc.'s proposed $75 million senior unsecured notes add-on offering to the company's existing $175 million 7 1/8% notes due 2012.

Moody's also affirmed the company's B2 senior implied rating and the speculative grade liquidity rating at SGL-2. The outlook remains stable.

The add-on notes offering will be used to partially fund the previously announced acquisition of about 48 Bcfe of proved reserves primarily located in the company's North Louisiana-East Texas core areas for $94.7 million.

Moody's said the company's ratings are supported by the continued progress in growing the company's reserves and production through its drilling program at comparably competitive costs, the progress in reducing leverage over the past four years, the geographically diversified reserve base, improved full cycle costs and the very supportive commodity price outlook.

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