Fitch assigns California Resources B+

Fitch Ratings said it assigned a B+ first-time long-term issuer default rating to California Resources Corp. Fitch also assigned BB+/RR1 ratings to the company's secured reserve-based lending credit facility and BB-/RR3 rating to the company's senior unsecured notes. The outlook is stable.

“CRC's ratings reflect its large, low-decline asset base with exposure to Brent pricing, conservative capital structure, forecast sub-1.5x leverage, expectations of positive FCF through the rating horizon, strong liquidity and proactive hedging program that limits downside risks. These factors are partially offset by the company's high-cost structure, which limits economic drilling prospects and exposure to California's stringent regulatory environment that could disrupt permitting, drilling and financing options in the medium and long term,” Fitch said in a press release.

Fitch said it estimates CRC will generate positive post-dividend FCF of about $450 million in 2023 and $125 million in 2024, at Fitch's base case prices of $80 per barrel and $70 per barrel, respectively.

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