S&P: Regency Energy unaffected

Standard & Poor's said that Regency Energy Partners LP's announcement that it issued $80 million of convertible preferred units to investors MTP Energy Management and Harvest Partners will not immediately affect the company's BB- ratings or negative outlook.

S&P said it views the transaction as marginally enhancing the company's business profile because it will use about $63 million of the proceeds to purchase an additional 5% ownership interest in the Haynesville Joint Venture from GE Energy Financial Services.

However, the convertible preferred units do not qualify for equity credit under S&P's hybrid criteria. Therefore, the new capital coupled with continued weakness in natural gas and natural gas liquids prices could cause Regency Energy's financial metrics to decline in the third quarter, the agency said.

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