S&P raises SM Energy

S&P said it raised SM Energy Co.’s rating to B- from CCC+, its unsecured notes to B from B- and its second-lien notes to B+ from B. The recovery rating on the unsecured notes is 2 and 1 on the second-lien notes. The agency also revised the outlook to stable from negative.

The agency recently raised its crude oil price assumption to $55 per barrel for the remainder of 2021 and 2022, up from $45 per barrel, which will support improved cash flow metrics for SM Energy Co.

“We also believe the risk of SM Energy executing another distressed exchange is remote, given the improvement in capital markets and the company's bond prices,” S&P said in a press release.

The outlook reflects a forecast that SM Energy will meet its upcoming debt maturity schedule through free cash flow and drawings on its credit facility, the agency said.

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