Fitch upgrades MEG Energy

Fitch Ratings said it upgraded MEG Energy Corp.'s issuer default rating to B+ from B. Also, Fitch has affirmed the rating on MEG's second-lien notes at BB/RR2 and upgraded the senior unsecured notes to BB-/RR3 from B+/RR3.

“MEG's ratings reflect improving credit metrics, below average refinancing risk, no major bond maturities until 2025, abundant liquidity, the expectation that the company will generate positive FCF over the forecast period, improved transport logistics that should lead to higher realized prices, and an improving cost structure,” Fitch said in a press release.

However, MEG is exposed to potentially wide and volatile West Texas Intermediate and Western Canadian Select spreads, lack of diversification and a challenging regulatory environment managed by the Alberta and federal governments, the agency noted.

The outlook is stable.

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