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Moody's upgrades SM Energy
Moody's Investors Service said it upgraded SM Energy Co.'s corporate family rating to B1 from B2, probability of default rating to B1-PD from B2-PD, senior secured rating to Ba3 from B1 and senior unsecured rating to B2 from B3. The speculative grade liquidity rating was upgraded to SGL-1 from SGL-2, and the agency changed the outlook to positive from stable.
"The upgrade of SM's ratings reflects the company's continued improvement in its debt leverage, focus on simplifying the capital structure by paying off the second lien notes amid current strong commodity price environment," commented Sreedhar Kona, a Moody's senior analyst, in a press release.
"SM's ability and willingness to further reduce debt through 2022 and the prospect of durable improvement in the company's credit metrics while maintaining its significant scale, contribute to the positive outlook. SM's competitive cost structure and considerable inventory of highly economic drilling locations will allow the company to maintain its size and scale," Kona said.
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