Moody's rates Regency Energy notes B1

Moody's Investors Service said it assigned a B1 (LGD4, 60%) rating to the senior notes due 2022 issued by Regency Energy Partners LP and Regency Energy Finance Corp. The outlook is positive.

Note proceeds will be used to repay revolver borrowings and for the cash portions of some acquisitions that the company is in the process of closing.

The agency said Regency's Ba3 corporate family rating reflects its large size and scale, notwithstanding the financial constraints associated with its master limited partnership organizational structure; its business and geographic diversification and high level of fee-based income derived from recent expansions and acquisitions.

The rating also recognizes the company's rapid growth and evolving business mix profile, the execution risks associated with its growth projects, increased structural complexity and its elevated leverage, Moody's said.

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