S&P rates MEG Energy notes BB

Standard & Poor's said it assigned a BB rating and 3 recovery rating to MEG Energy Corp.'s proposed $750 million senior unsecured debt issue.

A 3 recovery rating indicates 50% to 70% expected default recovery.

Given the substantial default scenario enterprise value estimated for MEG Energy, the agency said it believes the incremental debt proposed will benefit from the same recovery prospects estimated for the company's current senior unsecured debt.

Consistent with MEG's established financing policies, S&P said it expect proceeds from this bond issue will fund the company's capital expenditures from 2013 to 2015.

The negative outlook continues to reflect the execution risks attributed to MEG's growth and marketing strategies, the agency said.

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