Moody's rates Lonestar notes Caa2

Moody's Investors Service said it assigned a Caa1 corporate family rating, a Caa1-PD probability of default rating and an SGL-2 speculative grade liquidity rating to Lonestar Resources America Inc. and a Caa2 (LGD5, 70%) rating to its proposed $200 million senior notes. The outlook is stable.

The proceeds will be used to repay all outstanding borrowings on Lonestar's revolving credit facility and term loan, including amounts used to fund a March 13 acquisition of properties in the Eagle Ford Shale.

"Through a series of transactions since early 2013, Lonestar has built up a high-quality acreage position in the Eagle Ford's oil window," Andrew Brooks, Moody's vice president, said in an agency news release.

"However, the company is small in the size and scope of its operations, with a limited operating history. Relative debt leverage is high at the outset, with leverage metrics expected to improve through 2015."

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