S&P rates Talos notes BB-

S&P said it assigned BB- issue-level and 1 recovery ratings to Talos Production Inc.'s $1 billion second-lien debt offering, consisting of second-priority senior secured notes due 2029 and second-priority senior secured notes due 2031. The 1 recovery rating indicates substantial (90%-100%; rounded estimate: 95%) recovery of principal if Talos defaults.

The ratings are in line with Talos Production’s outstanding senior secured notes.

The notes will be guaranteed on a senior basis by parent Talos Energy Inc. and certain of the company's existing and future subsidiaries.

The company is expected to use the proceeds to refinance its $639 million of second-lien notes due 2026 and fund a portion of its previously announced $1.29 billion acquisition of Quarternorth Energy Inc.

The outlook is stable.

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