Moody's rates Regency Energy notes B1

Moody's Investors Service said it assigned a B1 (LGD 4, 63%) rating to Regency Energy Partners LP and co-issuer Regency Energy Finance Corp.'s senior unsecured notes due 2023.

The proceeds will be used to fund the cash consideration of Regency's $1.5 billion acquisition of Southern Union Co. Gathering LLC from Southern Union Co.

The outlook is positive.

The acquisition, while representing a high EBITDA multiple for natural gas gathering and processing operations, will be 60% equity-financed by Regency, Moody's said, and is highly complementary with Regency's existing Permian Basin gathering and processing system.

The acquisition also will further enlarge the already sizable scope and scale of Regency's midstream footprint, the agency said.

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