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Moody's upgrades Lonestar Resources
Moody's Investors Service said it upgraded Lonestar Resources America Inc.'s corporate family rating to Caa1 from Caa2, probability of default rating to Caa1-PD from Caa2-PD and senior unsecured notes to Caa2 from Caa3.
The speculative grade liquidity rating also was changed to SGL-3 from SGL-4.
The outlook is stable.
The upgrades reflect the steady progress the company has made developing its resources, gaining scale and improving its capital structure, Moody's said.
Although the agency said it expects the company's credit metrics to improve significantly through year-end 2018, the company will face challenges and significant costs developing its largely undeveloped acreage position in the Eagle Ford shale, the agency said. This is a rating constraint, Moody's said.
The company said it expects its leverage ratio will be in the mid-2x range by year-end 2018 based on capital spending of $85 million to $90 million in 2018, the agency noted.
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