- Vanguard Natural Resources (VNR -0.1%) is upgraded to Hold from Sell at Stifel following the relatively successful completion of its spring credit re-determination.
- While VNR is overdrawn by $63.5M net of cash on hand, Stifel believes the partnership can cure the deficiency with an estimated $80M excess free cash flow over the next six months; assuming VNR succeeds in curing the deficiency, the firm does not expect the trigger of the 5.25x leverage covenant in FY 2016 following last week's close of its SCOOP/STACK sale.
- Stifel hikes its view of VNR in light of the near-term risk taken off the table, although it thinks H2 could be at risk should commodity prices not improve and the partnership face another reduction during its fall re-determination.