S&P rates Memorial Resource notes B-

Standard & Poor's said it assigned its B corporate credit rating to Memorial Resource Development LLC.

The outlook is stable.

At the same time, the agency assigned its B- issue-level rating to the company's proposed $350 million unsecured PIK toggle notes due 2018 with a recovery rating of 5, indicating an expectation of modest (10% to 30%) recovery in the event of a payment default.

S&P expects Memorial Resource will use net proceeds from the proposed notes to pay a $220 million dividend to its owners, refinance the $60 million outstanding under its revolving credit facility and fund a cash debt service reserve of $50 million to pay interest and certain other payments on the notes.

"The ratings on MRD reflect our view of the company's 'vulnerable' business risk and 'aggressive' financial risk," S&P credit analyst Christine Besset said in a news release.

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