S&P moves Ascent outlook to positive

S&P said it revised its outlook for Ascent Resources Utica Holdings LLC to positive from stable and improved the recovery rating on the company’s senior unsecured notes to 3 from 4 indicating meaningful (50%-70%; rounded estimate: 55%) recovery in default. The agency also affirmed the B+ ratings on Ascent and its notes.

Ascent recently redeemed its $550 million second-lien term loan due 2025 with borrowings from its revolver The company then issued $212.6 million of its 2028 unsecured notes in an add-on offering, using the proceeds to reduce borrowings on its credit facility.

“These transactions lowered interest expenses, simplified the capital structure and extended Ascent's maturity profile. Additionally, we expect the company will use its free cash flow generation to lower its borrowings on its credit facility,” the agency said in a press release.

“We expect Oklahoma-based oil and gas exploration and production company Ascent Resources Utica Holdings LLC's financial measures to improve due to continued reduction in its debt and a focus on free cash flow generation supported by a strong hedging program,” S&P said.

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