S&P cuts Eagle Rock view, ups senior unsecured outlook

Standard & Poor's said it affirmed its B corporate credit rating on Eagle Rock Energy Partners LP and revised the outlook to negative.

S&P also placed the B senior unsecured rating on Eagle Rock on CreditWatch with positive implications. S&P maintained Eagle Rock's senior unsecured recovery rating at 4.

The negative outlook reflects S&P's view that pro forma for the transaction, in which Eagle Rock will sell its midstream business to Regency Energy Partners LP, Eagle Rock will have less asset diversity, the potential for greater cash flow volatility as a pure-play E&P company and uncertainty around future capital spending and financial policies.

"In our opinion, these factors more than offset the benefit of lower financial leverage," said S&P credit analyst Nora Pickens in a news release.

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