Moody’s rates WildHorse notes Caa1

Moody's Investors Service said it assigned first-time ratings to WildHorse Resource Development Corp., including a B3 corporate family rating and Caa1 (LGD 5) rating to its proposed offering of $300 million of senior unsecured notes due 2025.

Moody's also said it assigned an SGL-3 speculative grade liquidity rating based on an expectation of adequate liquidity for the company through 2017.

The proceeds will be used to repay outstanding borrowings on the company's revolving credit facility, the agency said.

The outlook is stable.

Through a series of transactions largely funded by equity since 2013, WildHorse has assembled an extensive inventory in east Texas and north Louisiana with over 2,200 net drilling locations, Moody’s explained.

This acreage position provides substantial opportunities for the company to grow its production and reserves, the agency added.

But the future development of this acreage position will require significant capital and the company is expected to outspend cash flow through 2018 in its quest for growth, Moody’s said.

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