Moody's rates Calumet notes B2

Moody's Investors Service said it assigned a B2 rating to Calumet Specialty Products Partners, LP's proposed $325 million senior notes. The company’s other ratings, including its B1 corporate family rating, are unchanged, and the outlook remains stable.

The note proceeds together with a portion of the proceeds of the company’s recently completed $157 million equity issuance will be used to redeem the partnership's $275 million outstanding 9 5/8% notes due 2020 and to repay revolver borrowings.

The agency said Calumet's B1 corporate family rating reflects the partnership's operational and geographic diversity, the relative stability gained from its downstream specialty products and its access to advantaged feedstock for its refining business.

Moody’s said Calumet's rating is constrained by its exposure to transportation fuels produced in its refinery business, which are inherently more volatile and cyclical product lines than those in its downstream specialty products segment; its corporate structure as a master limited partnership, which entails sizable distributions to unitholders that increase over time; and ongoing event risk from acquisitions, which are expected to remain an important part of Calumet's growth strategy.

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