Jul. 23 at 8:45 PM
Moody’s revised Matador Resources’ outlook to stable from positive, affirming its Ba3 Corporate Family Rating, Ba3-PD Probability of Default Rating, and B1 senior unsecured notes rating, while downgrading its liquidity rating to SGL-2 from SGL-1.
The outlook change reflects significantly higher leverage following a series of acquisitions totaling more than
$3.3 billion, including Delaware Basin acreage, Cardinal Midstream Partners, and Paloma Permian. Moody’s estimates total debt could rise about 75% to nearly
$6.4 billion if the deals are largely debt-financed. The agency cited increased balance-sheet risk and limited near-term cash flow contributions from the acquired assets.
Management plans to reduce leverage toward its long-term target of ~1x net debt within 12–18 months, but Moody’s noted this will depend on sustained high oil prices. The company would face challenges deleveraging if WTI falls below
$60 per barrel.
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