Moody’s: American Energy – Marcellus loans Ba3, Caa1

Moody's Investors Service said it assigned a B2 corporate family rating to American Energy - Marcellus, LLC.

The agency also assigned a B2-PD probability of default rating, a Ba3 rating to its $750 million first-lien term loan and a Caa1 rating to its $450 million second-lien term loan.

The outlook is stable.

The company is raising $1.2 billion of new debt to fund the acquisition of about 48,000 net acres in the southern Marcellus Shale of northern West Virginia from East Resources, Inc. and an unnamed private company for $1.275 billion. The remainder of the acquisition will be financed with new sponsor equity.

"American Energy - Marcellus, LLC has purchased promising Marcellus shale acreage and has a compelling production growth trajectory," Moody's vice president and senior analyst Michael Somogyi said in a news release.

"Nonetheless, the company's largely undeveloped reserve base, natural gas concentrated production and execution risks in implementing drilling plans serve to restrain the rating until the company delivers on its development objectives."

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