S&P Global Ratings on March 31 downgraded Range Resources Corp.'s issuer credit rating to B from BB- and on the senior unsecured debt to B+ from BB-. The outlook is negative.

Ratings said it anticipates the company's credit measures to fall below its expectations for the BB- rating over the next two years due to lower oil and gas price assumptions. The rating agency decreased its oil and gas price assumptions after Saudi Arabia and Russia launched an oil price war that tanked commodity prices and exacerbated supply-demand imbalance in the market.

The negative outlook reflects the ways that low gas prices can affect existing covenants and weakened capital market conditions, which could lead to difficulties in refinancing the company's near-term maturities, Ratings wrote on March 31.

Range recently cut its 2020 capital budget to $430 million. While Ratings acknowledged that this measure improves the company's near-term cash conservation, the agency said that loss of production and declining margins translate to lower ratios than would be acceptable for the BB- rating.

Ratings noted that it could lower the rating further if Range Resources fails to address its 2022 and 2023 maturities in a timely fashion or if the company breaches its 2.5x interest coverage, weakening liquidity. Ratings said may revise the outlook to stable under a few potential conditions: if the company proactively address its 2022 and 2023 maturities through secured financing or asset sales should the capital markets allow, or if Range starts creating positive free operating cash flow from higher-than-expected oil and gas prices.

This S&P Global Market Intelligence news article contains information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.