Moody’s lowers Approach notes to Caa1

Moody's Investors Service said it downgraded Approach Resources Inc.'s senior unsecured notes rating to Caa1 from B3 and changed the speculative grade liquidity rating to SGL-3 from SGL-2.

The agency also affirmed Approach's B2 corporate family rating and B2-PD probability of default rating.

The outlook is stable.

"The increased size of the borrowings under the borrowing base credit facility relative to the unsecured notes results in the notes being rated two notches below the B2 CFR under Moody's Loss Given Default (LGD) methodology," Moody's senior analyst Sreedhar Kona said in a news release.

"Approach's SGL-3 rating indicates adequate liquidity into 2016 to cover capital expenditure needs and service the debt."

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