(Fitch, 4.Sep.2024) — Fitch Ratings rates the $250mn add-on issue to Crescent Energy Finance LLC’s existing $750mn 7.375% 2033 notes, in line with Crescent’s existing senior unsecured debt BB- ratings. The proceeds from the new tap issue will be used to reduce borrowings under the company’s reserve-based lending facility.
Crescent announced a planned bolt-on acquisition of central Eagle Ford assets together
with the tap issue. The deal consideration is $168mn, paid in cash. Crescent expects to close the acquisition in Sep. 2024. The assets produce approximately 4,000 barrels of oil equivalent per day (boe/d) with a high oil content of 85% and some mineral royalty interest, which enhances their economics.
The increase in production scale would not be material for Crescent given its production pro forma for the recent SilverBow acquisition close to 250,000 boe/d. We expect Crescent’s midcycle leverage to stay at 1.6x after the bolt-on acquisition, which is within the rating guidelines.
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