S&P rates Vermilion, notes BB-

Standard & Poor's said it assigned a BB- long-term corporate credit rating to Vermilion Energy Inc.

The outlook is stable.

S&P said it assigned the company's proposed C$200 million of senior notes a BB- issue-level rating and 4 recovery rating, indicating the expectation for average recovery (30%-50%) in the event of default.

Vermilion plans to use the proceeds largely to pay down the amount outstanding on its credit facility and cover related fees.

The ratings reflect the company's geographically diversified reserve base and moderate capital structure, the agency said.

The ratings also consider its participation in the highly cyclical exploration and production segment of the oil and gas industry, its historical reliance on acquisitions and exploitation for reserve replacement and growth, relatively low proven reserves base and reserve life index, and its aggressive dividend policy, S&P said.

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