Moody's affirms Regency Energy

Moody's Investors Service said it affirmed Regency Energy Partners LP's corporate family rating and probability of default rating at Ba3, speculative grade liquidity rating at SGL-3 and senior unsecured notes rating at B1 (LGD 5, 80%).

The outlook was revised to positive from stable.

This action is in response to news that Regency's general partner sponsor, an affiliate of GE Energy Financial Services, has sold its interest in Regency's unit to Energy Transfer Equity, LP for $300 million and that Regency was purchasing a 49.9% stake in Midcontinent Express Pipeline LLC from Energy Transfer Equity, Moody's said.

The ratings reflect the expected benefits to Regency from the Midcontinent Express acquisition, including increased scale and diversification, with a greater proportion of fee-based revenues, which helps mitigate the risks associated with the change in sponsorship from financially stronger GE to Energy Transfer, the agency said.

There is a degree of uncertainty regarding the company's future growth strategy and financial policies under Energy Transfer's control, Moody's added.

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