S&P affirms Vulcan, Plains

Standard & Poor's said it affirmed the BB corporate credit rating on Vulcan Energy Corp. and the BBB- corporate credit rating on Plains All American LP.

The outlook is stable.

The agency also affirmed the BB rating and 4 recovery rating on Vulcan's secured term loan due 2011 and the BBB- rating on Plains' senior unsecured notes.

S&P said the affirmation follows Occidental Petroleum Corp.'s (A/stable/A-1) plans to acquire a 10% equity interest of the general partner interest in Plains.

The rating on Vulcan reflects its reliance on upstream distributions from Plains to support its debt service and administrative expenses, the agency said.

The rating on Plains reflects a satisfactory business risk profile and a moderately leveraged financial risk profile, S&P said.

Partially offsetting these factors are Plains' volatile marketing segment, its acquisitive growth strategy and the potential strain that volatile crude oil prices could place on liquidity, the agency noted.

S&P said it expects Vulcan's debt-to-EBITDA ratio at about 3 times in the second half of 2008. In comparison, leverage was 4.5 times in 2006.

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