Moody's assigns SierraCol, notes B1

Moody's Investors Service said it assigned a B1 corporate family rating to SierraCol Energy Ltd. and a B1 rating to wholly owned subsidiary SierraCol Energy Andina, LLC's planned up to $500 million of guaranteed senior unsecured notes due 2028.

“The B1 ratings on SierraCol and on SierraCol Andina's proposed notes are based on SierraCol's small asset base and size of crude oil production; high operating risk due to geographic concentration and the mature nature of its oil and gas assets in Colombia; and event risk related to possible acquisitions. Simultaneously, the ratings are supported by SierraCol's high operating margins, which derives in low debt leverage and high interest coverage ratios for the B1 rating category; its strong management team; and the solid sponsorship from the Carlyle Group (Carlyle), through its international energy fund Carlyle International Energy Partners (CIEP),” Moody’s said in a press release.

The proceeds will be used to refinance debt, pay dividends and for general corporate purposes.

The outlook is stable.

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