S&P ups Aethon United BR

S&P said it raised Aethon United BR LP’s issuer rating to B from B- and its senior unsecured rating to B+ from B. The 2 recovery rating indicates an expectation for substantial (70%-90%; rounded estimate: 85%) recovery of principal in default.

The agency noted the company has boosted production to levels commensurate with a B rating.

“We expect improving financial metrics and free cash flow over the next 12-24 months. We expect Aethon to focus on free cash flow generation after several years of outspend to fund rapid growth, which should help support improving financial measures and liquidity. Modest financial policies should support funds from operations (FFO) to debt of over 50% and debt to EBITDA below 2x through 2023,” S&P said in a press release.

The outlook is stable.

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