S&P rates Atlas notes B-

Standard & Poor's said it assigned a B corporate credit rating to Atlas Resource Partners LP.

The agency also assigned a B- rating to Atlas Resource Finance Corp. and Atlas Energy Holdings Operating Co. LLC's proposed $250 million senior unsecured notes due 2021.

S&P also assigned a 5 recovery rating to the notes, indicating 10% to 30% expected default recovery.

The two companies are subsidiaries of Atlas and the company will use proceeds from the transaction to fund repayment of existing debts and for general corporate purposes.

The outlook is stable.

The ratings reflect its small, predominantly natural gas reserve and production base, sizable distributions to unit-holders under its structure as a master limited partnership and limited reserve replacement history, the agency said.

The ratings also consider the volatility and capital intensive nature of the oil and gas industry, S&P said.

These weaknesses are adequately offset by its moderate debt leverage, relatively low operating risk related to multiple onshore U.S. basins and a willingness to use equity to fund acquisitions, the agency added.

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