Moody's may lower Denbury

Moody's Investors Service said it placed the ratings for Denbury Resources, Inc.'s under review for possible downgrade.

This action is in response to the announcement that Denbury and Encore Acquisition Co. have entered into a definitive merger agreement pursuant to which Denbury will acquire Encore in a transaction valued at about $4.5 billion, the agency said.

The ratings under review are Denbury's Ba3 corporate family rating , the Ba3 probability of default rating, and B1 (LGD 4, 69%) rating on the senior subordinated notes, Moody's said, noting that it also placed the ratings for Encore under review for possible downgrade.

The ratings under review are Encore's Ba3 CFR, Ba3 probability of default rating, its B1 (LGD 5, 74%) rating on its senior subordinated notes, and shelf ratings, the agency said.

"The review for downgrade reflects Denbury's significantly higher pro forma leverage" said Ken Austin, senior credit officer at Moody's.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.