Moody's upgrades SM Energy

Moody's Investors Service said it upgraded SM Energy Co.'s corporate family rating to B3 from Caa1 and probability of default rating to B3-PD from Caa1-PD. Concurrently, Moody's also raised SM's senior secured rating to B2 from B3, its senior unsecured rating to Caa1 from Caa2. Moody’s also upgraded the speculative grade liquidity rating to SGL-2 from SGL-3.

"The upgrade of SM's ratings reflects the company's improving debt leverage, substantially lower probability of default and a manageable debt maturity profile," commented John Thieroff, a Moody's senior credit officer, in a press release.

"SM's competitive cost structure and considerable inventory of highly economic drilling locations in the Midland basin will support modest production growth while allowing for debt reduction,” Thieroff added.

The outlook is positive.

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