S&P rates Linn Energy notes B

Standard & Poor's said it affirmed the B+ corporate credit rating on Linn Energy LLC and revised the outlook to positive from stable.

The agency also said it assigned a B rating to Linn's proposed $750 million senior unsecured notes. The rating is one notch below the corporate credit rating and has a recovery rating of 5, indicating 10% to 30% in a default.

The outlook revision reflects the potential for an upgrade over the next 12 months if Linn can maintain debt leverage of 3.5x or less, while continuing to pursue its acquisitive growth strategy, S&P said.

The agency said it expects Linn to continue its mix of debt and equity funding for acquisitions.

The ratings consider the company's growing mid-size reserve base, aggressive financial leverage and substantial quarterly distributions paid to unit holders, S&P said.

The low geological risk inherent in the company's reserve base, balanced production mix between natural gas and liquids and substantial commodity price hedges partially offset these weaknesses, the agency added.

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