Moody's rates Carrizo notes B2

Moody's Investors Service said it assigned a B2 (LGD5) rating to Carrizo Oil & Gas, Inc.'s proposed $600 million senior notes due 2023. Its B1 corporate family rating, B1-PD probability of default rating, B2 (LGD5) senior debt rating and SGL-2 speculative grade liquidity rating are unaffected, and the outlook is stable.

The proceeds from the proposed notes offering will be used to fund the tender offer for Carrizo's $600 million 8 5/8% senior notes due 2018.

The agency said Carrizo's B1 corporate family rating reflects the company's fairly balanced portfolio of oil and natural gas properties and management's good track record of financing its growth with a combination of equity financing, asset sales, joint venture formations and debt in order to maintain credit metrics that are supportive of the B1 rating.

The B1 rating is restrained by Carrizo's small scale in terms of production and proved developed reserves relative to Ba3-rated exploration and production companies, Moody’s said.

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