Moody's rates MxEnergy notes Caa1, assigns SGL-3

Moody's Investors Service said it assigned first-time ratings to MxEnergy Holdings Inc., including a B3 corporate family rating and a Caa1 rating to its proposed offering of $200 million floating-rate senior notes due 2011. Moody's also assigned a speculative grade liquidity rating of SGL-3 to MxEnergy.

The outlook is stable.

The B3 corporate family rating reflects MxEnergy's complex business model that requires a high degree of precision, expertise and strong control to execute effectively due to the large number of accounts, high customer attrition and the risks associated with managing its fixed price exposure.

Support for the rating comes from MxEnergy's progress in establishing a meaningful base of customer accounts in a competitive business; its ability to maintain relatively steady margins over the last couple of years, although that has taken place in a favorable market environment; and experienced management team with expertise in energy marketing operations.

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