S&P rates MxEnergy B, loan CCC+

Standard & Poor's said it assigned its B corporate credit rating to MxEnergy Holdings Inc. and assigned its CCC+ rating to MxEnergy's proposed $200 million senior unsecured debt offering.

The outlook is stable.

S&P added that the two-notch differential between the corporate credit rating, which indicates the risk of default at MxEnergy and the senior unsecured debt reflects the poor prospects for recovery of the unsecured debt upon default given that all of MxEnergy's assets, including receivables, inventory and customer contracts are pledged under a revolving credit facility and a separate hedge facility, both with Societe Generale.

The agency said that the rating reflects formal risk management systems at MxEnergy that are still in the early stages of development and a lack of internal auditing function and weak processes, documentation and internal controls.

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