S&P upgrades SM Energy

S&P said it upgraded its ratings for SM Energy Co. to CCC+ from D and its 2022 and 2024 notes to B- from D. The recovery rating is 2.

The upgrade follows S&P’s downgrade on SM Energy’s below-par buybacks of its notes due 2022 and 2024.

“SM Energy will likely have difficulty addressing its 2024 notes on favorable terms. Currently, the company could repay the approximately $300 million remaining of its 2021 and 2022 notes outstanding, but we believe it could run into difficulty addressing the remaining $315 million on its 2024 notes. The company has approximately $380 million in second-lien capacity remaining, as well as an estimated $200 million basket remaining on its credit facility that can be used for 2021 and 2022 debt repurchases,” the agency said in a press release.

The outlook is negative.

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