Southwestern Energy Company shares were lower 4% on Tuesday as Fitch Ratings said the ratings outlook has been revised to stable from positive while it also upgraded the company’s long-term issuer default rating to ‘BB’ from ‘B+’.
Fitch said it has also upgraded Southwestern’s secured term loan to ‘BBB-‘/’RR1’ from ‘BB+’/’RR1’ and secured credit facility and unsecured debt to ‘BB’/’RR4’ from ‘B+’/’RR4’.
“The upgrade reflects the company’s improved liquidity position and reduced repayment/refinance risk following the recently completed bank, equity, and debt tender transactions, as well as the pending West Virginia acreage sale,” Fitch said. “This helps moderate Fitch’s previous concern that there was heightened capital structure event risk. Another consideration is the recently increased 2016 capital budget that will help re-establish operational momentum and moderate production declines.”
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