S&P assigns Leviathan notes BB-

S&P said it assigned a preliminary BB- rating to Leviathan Bond Ltd.’s planned $2.25 of senior secured notes to be issued in four bullet series with maturities of 2023, 2025, 2027 and 2030. The preliminary recovery rating is 1.

“The preliminary rating incorporates a sponsor loan that Leviathan Bond will provide to Delek Drilling LP (Delek Drilling), which is a 45.3% joint leaseholder of the Leviathan field that will generate the revenue for the repayment of the notes,” S&P said in a press release.

The proceeds will refinance Delek Drilling’s $1.75 billion debt it raised for the field’s deployment debt, fund a $100 million debt repayment fund, repay $300 million of secured corporate debt and the remaining proceeds will be used for general corporate purposes.

The outlook is stable. “The stable outlook reflects our expectation that the project will produce and sell approximately up to 12 billion cubic meters (BCM) annually, leading to a debt service coverage ratio (DSCR) of more than 3x in the next 24 months.

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