TEXT-S&P rates Antero Resources Finance's notes 'B+'
Nov 14 - Standard & Poor's Ratings Services today assigned issue-level and recovery ratings to Antero Resources Finance Corp.'s $300 million senior unsecured notes due 2020. The assigned issue rating on the notes is 'B+' (the same as the corporate credit rating). The recovery rating on this debt is '4', indicating our expectation of average (30% to 50%) recovery in the event of default. The issue and recovery ratings are based on the rating of exploration and production company Antero Resources LLC (B+/Stable/--), which guarantees the proposed notes on a senior unsecured basis. The company intends to use proceeds to repay a portion of the outstanding borrowings under its senior secured revolving credit facility and for general corporate purposes. A key assumption in our analysis is that we expect the company's commitment on its revolver to decline to approximately $700 million following the close of the sale of its Piceance assets. The ratings on Denver-based Antero Resources LLC (Antero) reflect our assessment of the company's "weak" business risk and "aggressive" financial risk. The ratings on Antero incorporate the company's participation in the competitive and highly cyclical oil and gas industry, the high percentage of proved undeveloped (PUD) reserves, significant costs associated with the company's development of its proved reserve base, and its high concentration of natural gas reserves. Our ratings also reflect the company's good cash operating costs, solid reserve replacement, and Antero's favorable hedges. -- RELATED CRITERIA AND RESEARCH -- Methodology: Business Risk/Financial Risk Matrix Expanded, Sept. 18, 2012 -- Liquidity Descriptors For Global Corporate Issuers, Sept. 28, 2011 -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008 Temporary telephone contact numbers: Stephen Scovotti (347-839-0615); Marc Bromberg (347-573-0897) RATINGS LIST Antero Resources LLC Corporate credit rating B+/Stable/-- New Ratings $300 mil sr unsecrd nts due 2020 B+ Recovery rating 4 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.