TEXT-S&P rates Newfield Exploration notes 'BBB-'
June 19 - Standard & Poor's Ratings Services today assigned its 'BBB-' issue-level rating (same as the corporate credit rating) to Houston-based Newfield Exploration Co.'s proposed $750 million senior unsecured notes due 2024. The notes will be senior to the company's existing senior subordinated notes, but will be structurally subordinated to all obligations at the subsidiary level. Newfield's subsidiaries currently carry no debt, and we do not believe their priority liabilities (primarily trade receivables) create a material disadvantage for the issuer. Newfield plans to use proceeds from the proposed notes offering to partly fund the recent redemption of $325 million of 6.625% senior subordinated notes due 2014 and to redeem $550 million of 6.625% senior subordinated notes due 2016. The company has commenced a cash tender offer for the 6.625% senior subordinated notes due 2016, along with a consent solicitation on proposed amendments to the indenture governing the notes. The amendments would eliminate most of the covenants and certain default provisions, and shorten the minimum notice period for redemption of the notes. The 'BBB-' corporate credit rating and stable outlook on crude oil and natural gas exploration and production company Newfield reflect the company's satisfactory business risk and intermediate financial risk. The ratings also reflect our view that natural gas prices will remain weak over the next 12 to 18 months because of the significant growth in supply combined with flat demand. RELATED RESEARCH AND CRITERIA -- Liquidity Descriptors For Global Corporate Issuers, Sept. 28, 2011 -- Criteria Methodology: Business Risk/Financial Risk Matrix Expanded, May 27, 2009 -- Corporate Ratings Criteria 2008, published April 15, 2008. RATINGS LIST Newfield Exploration Co. Corporate credit rating BBB-/Stable/-- New Rating Proposed $750 mil sr unsecd nts due 2024 BBB- Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.
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