S&P gives Exterran BB, loan BB+

Standard & Poor's said it assigned its BB corporate credit rating to Exterran Holdings Inc.

At the same time, S&P said it assigned its BB+ rating, one notch above the corporate credit rating, and 2 recovery rating, indicating an expectation of substantial recovery in the event of payment default, to Exterran's $1.65 billion credit facilities.

The 4.75% convertible notes due 2008 and 2014 that are under Hanover Compressor Co. will be rated B+, two notches below the corporate credit rating, and removed from CreditWatch with positive implications and will become Exterran's obligations following the closing of the merger, the agency added.

The outlook is stable.

According to S&P, the ratings on Exterran reflect the company's participation in the highly competitive, capital-intensive, natural gas compression services industry, the cyclical nature of the fabrication and production and processing segment, a leveraged financial profile, integration challenges and the master limited partnership structure of its growing subsidiary UCLP.

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