S&P lowers Linn Energy

Standard & Poor’s said it lowered the rating on Linn Energy LLC’s senior unsecured debt to B from B+ and removed the rating from CreditWatch, where it was placed with negative implications in July following its plans to purchase certain oil and gas assets from Devon Energy Corp. and its intention to sell its assets in the Granite Wash.

The agency also said it revised the recovery rating on the unsecured debt to 6 from 5. The 6 recovery rating reflects 0 to 10% expected default recovery.

S&P also said it assigned a B rating to Linn Energy’s proposed $1 billion senior notes with a recovery rating of 6.

The proceeds from the notes will be used to repay certain indebtedness relating to the purchase of assets from Devon, the agency said.

The downgrades reflect the lower recovery expectations on the debt on account of the increase in the level of senior unsecured debt claims, S&P said.

Linn Energy’s BB- corporate credit ratings and stable outlook are unaffected.

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