S&P ups Laredo Petroleum notes to B

S&P said it raised the rating on Laredo Petroleum Inc.’s senior unsecured notes to B from B- and revised the recovery rating to 2 from 3.

“We expect Laredo's credit measures to improve under our revised oil price assumptions. We have revised our price assumptions for WTI crude oil for 2021 and 2022 to $55/bbl, which is a $10/bbl increase from our previous assumptions, and we maintained our longer-term $50/bbl crude oil price assumption for 2023 and beyond. We did not change our natural gas price assumptions. As a result, we expect Laredo to generate better cash flows and improved credit measures; however, the company's hedges limit the overall impact of higher prices,” the agency said in a press release.

S&P affirmed Laredo’s B- rating but revised the outlook to stable from negative.

“The stable outlook reflects our expectation that Laredo will maintain credit measures appropriate for the rating over the next 12 months, including average funds from operations (FFO) to debt of about 30%, supported by robust hedging,” the agency said.

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