Moody's: Energy Partners direction uncertain

Moody's Investors Service said it changed Energy Partners, Ltd.'s ratings review for possible downgrade to review direction uncertain (B2 corporate family rating; B2 senior unsecured note rating). This action follows Woodside Petroleum Ltd.'s (Baa1 senior unsecured rating at Woodside Finance Ltd., stable outlook) announcement that it has made, through its U.S. subsidiary ATS, Inc., an unsolicited offer to acquire Energy Partners for $1.18 billion, including assumed debt.

The rating review direction uncertain reflects the possibility that Energy Partners' ratings could be downgraded, upgraded or confirmed with the acquisition's outcome. If Woodside's offer is unsuccessful, Energy Partner's ratings could be downgraded or confirmed, depending on Moody's assessment of the company's ability to reduce its substantial debt burden in a timely manner. However, if Woodside is successful in acquiring Energy Partners, the agency said an upgrade is likely, reflecting Energy Partner's currently low rating relative to the stronger credit profile of Woodside.

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