Moody's: Northern Oil notes Caa1

Moody's Investors Service said it assigned a Caa1 rating to Northern Oil and Gas, Inc.'s proposed $200 million senior unsecured notes due 2020.

The proceeds from the proposed notes offering will be used to repay borrowings under Northern Oil's secured revolving credit facility, fund capital expenditures and for general corporate purposes.

The company's other ratings are unchanged and the outlook is stable.

"The proposed bond issuance will improve Northern Oil and Gas' liquidity profile as its capital needs continue to outpace operating cash flow," Moody's vice president Gretchen French said in a news release.

"While Northern's attractive acreage position in the core Bakken and Three Forks plays should continue to support high margin production growth, leverage relative to production is expected to increase over the next 12-18 months as there remains a heavy level of capital intensity associated with its asset base," French added in the release.

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