S&P gives B to Kodiak notes

Standard & Poor's said it assigned its B issue-level rating (one notch lower than the corporate credit rating) to Kodiak Oil & Gas' proposed $400 million senior unsecured notes due 2022.

The senior unsecured recovery rating is 5, indicating the expectation of modest (10% to 30%) recovery in the event of a payment default.

The B+ corporate credit rating and stable outlook on Kodiak are unaffected.

The company intends to use proceeds to refinance borrowings under its credit facility.

S&P said the ratings on Kodiak Oil & Gas reflect its view of its "aggressive" financial risk profile, "weak" business risk profile and "adequate" liquidity assessment. These assessments reflect the company's relatively small asset base and production levels, lack of geographical diversification and high spending levels in excess of projected operating cash flows.

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