S&P upgrades Regency Energy, preferreds

Fitch Ratings said it upgraded the issuer default rating and senior unsecured ratings for Regency Energy Partners, LP to BBB- from BB, following the close of its merger with Energy Transfer Partners, LP, and removed it from Rating Watch Positive.

The agency also upgraded Regency Energy’s series A preferred units to BB from B+ and upgraded and withdrew the rating for its senior secured revolver following the termination of the revolver.

In addition, Fitch affirmed Energy Transfer’s BBB- issuer default rating and senior unsecured rating and its junior subordinated notes rating at BB. It also affirmed Panhandle Eastern Pipe Line Co.'s issuer default rating and senior unsecured rating at BBB- and junior subordinated notes at BB.

The outlooks for all of the entities are stable.

Fitch said the upgrade reflects the guarantees on the senior notes put in place by Energy Transfer. The withdrawal of the senior secured rating reflects the termination of Regency Energy’s senior secured revolver. Fitch believes that with Regency Energy’s acquisition, and its debt guaranteed and assumed by its higher rated affiliate, Regency Energy’s notes and issuer default rating should be rated at Energy Transfer’s rating.

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