Moody's gives EP Energy CFR Ba3

Moody's Investors Service said it assigned a Ba3 corporate family rating and a Ba3-PD probability of default rating to EP Energy LLC and withdrew the corporate family and probability of default ratings for EPE Holdings LLC.

EP Energy's Ba3 second-lien senior note rating and second-lien term loan rating and the B2 senior unsecured note rating were affirmed.

The agency also assigned a SGL-2 speculative grade liquidity rating, indicating good liquidity. The outlook is stable.

In January 2014, EP Energy Corp., the parent of EPE Holdings, raised roughly $700 million in an IPO. The proceeds were used to repay the balance of the payment-in-kind toggle notes that were outstanding at EPE Holdings, at a cost of about $395 million, and to repay a portion of the borrowings under EP Energy's revolving credit facility.

"The issuance of equity by EP Energy Corp. is clearly a credit positive event as it reduces leverage and provides equity funding for a portion of the 2014 capital expenditures program," Moody's vice president Stuart Miller said in a news release. "However, leverage remains elevated and above the targets we have set for an upgrade."

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