Moody's ups Laredo

Moody's Investors Service said it upgraded Laredo Petroleum, Inc.'s corporate family rating to B3 from Caa1 and confirmed the Caa2 rating on its senior notes.

The outlook is stable. This concludes the review which was initiated on June 16 in response to Laredo's announcement of plans to acquire Broad Oak Energy, Inc.

The upgrade reflects its increased scale, diversification and liquids production as a result of acquiring Broad Oak, the agency said.

The confirmation of the Caa2 note rating reflects increased notching between the corporate family rating and the note ratings because of a higher proportion of secured debt in the capital structure, the agency added.

The ratings reflect Laredo's strong returns relative to similarly rated peers, leverage on production which is high relative to peers and the scale of the company's proven developed reserve base, the agency noted.

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