Moody's rates Rockies Express notes Ba1

Moody's Investors Service said it assigned a Ba1 (LGD4, 55%) rating to Rockies Express Pipeline LLC's pending offering of up to $1.7 billion of unguaranteed senior unsecured notes.

The agency affirmed the Ba1 corporate family and probability-of-default ratings and Ba1 (LGD4, 55%) rating on $1.3 billion of senior unsecured unguaranteed notes.

The outlook is stable.

Proceeds will repay borrowings under the company's partner guaranteed Baa2 rated $2 billion construction loan credit facility maturing April 28, 2011.

Ratings reflect the company's pro-forma debt structure, which consists of non-amortizing debt and sustained leverage higher than is compatible with an investment-grade rating, particularly in view of ongoing shifts within North American gas markets, according to the agency.

The Ba1 ratings are supported by fixed tariffs on 97% of pipeline capacity, low expected capital spending needs and the fact that the company will remain an important gas pipeline, the agency said.

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