S&P rates Denbury Resources loan BBB-

Standard & Poor’s said it assigned its BBB- issue-level rating to Denbury Resources Inc.’s senior secured revolving credit facility, which matures in December 2019. The recovery rating on this debt is 1, indicating an expectation for very high (90% to 100%) recovery in the event of payment default.

The new credit facility has a maximum size of $3.5 billion, an initial borrowing base of $3 billion, and maintains total lender commitments of up to $1.6 billion, the same as the prior credit facility.

All of S&P’s existing ratings remain unchanged, including the BB corporate credit rating. The outlook remains stable.

S&P said the ratings on Denbury continue to reflect S&P’s “fair” business risk, “significant” financial risk and “strong” liquidity assessments. The ratings also reflect the company’s significant production of oil and its relatively low-risk exploitation strategy, focused on tertiary oil recovery.

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