Moody's eyes Colgate Energy for upgrade

Moody's Investors Service said it placed Colgate Energy Partners III, LLC's ratings on review for upgrade, including the company's B3 senior unsecured notes rating.

The review follows Colgate and Centennial Resource Development, Inc. and its principal operating subsidiary, Centennial Resource Production, LLC agreeing to merge.

"The proposed transaction is credit enhancing for Colgate Energy, given Centennial's stronger credit profile," commented Jonathan Teitel, a Moody's analyst, in a press release.

Upon the deal’s close, and if Centennial legally assumes or guarantees Colgate's bonds, making them pari passu with CRP's bonds, then the ratings on Colgate's notes would likely be upgraded to CRP's senior unsecured rating level of B2 depending on the pro forma capital structure, Moody’s said.

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