Moody’s rates Murphy Oil notes B1

Moody's Investors Service said it assigned a B1 rating to Murphy Oil Corp.’s proposed $500 million senior unsecured notes due 2024.

At the same time, the agency upgraded Murphy's speculative grade liquidity rating to SGL-3 from SGL-4 and affirmed the Ba3 corporate family rating, Ba3-PD probability of default rating and B1 unsecured notes.

The outlook was changed to stable from negative.

Proceeds from the proposed notes offering will be used for general corporate purposes, which may include the repayment of the company's 2˝% notes due 2017.

"The stabilization of the rating outlook reflects Murphy's improved liquidity profile, including cash from the proposed bond issuance, along with its new revolving credit facility and the recently closed sale of its stake in Syncrude," Moody's vice president Gretchen French said in a news release.

The B1 ratings on the proposed notes are rated in line with the company’s existing B1 unsecured debt ratings. Murphy Oil's capital structure is comprised of an unsecured revolving credit facility and unsecured notes.

The proposed notes, as well as Murphy Oil's existing unsecured notes, do not benefit from upstream guarantees from operating subsidiaries, and as a result are structurally subordinated to the obligations of the company’s subsidiaries, including its trade payables and its operating and capital leases (pension liabilities are at the holding company level), Moody’s said.

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