Moody's rates Memorial notes Caa1

Moody's Investors Service said it assigned a Caa1 rating to the $500 million senior notes due 2022 to be issued by Memorial Production Partners LP and Memorial Production Finance Corp. The outlook is stable.

The proceeds, in combination with proceeds from Memorial's recent equity offering, will be used to repay a portion of the outstanding borrowings under the company’s revolving credit facility and for general partnership purposes.

The agency said Memorial's B2 corporate family rating reflects its long-lived, shallow decline, predominately proved developed reserve base.

The rating is restrained by Memorial's high leverage on production and proved developed reserves and reflects the risks inherent in Memorial's acquisitive, high-payout master limited partnership corporate finance model, Moody’s said, but it also recognizes management's track record in issuing equity and active hedging program.

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