Moody’s ups Tallgrass notes, rates notes Ba3

Moody's Investors Service said it assigned a Ba3 rating to Tallgrass Energy Partners, LP's (TEP) proposed $500 million senior unsecured notes due 2028 and upgraded the existing senior notes ratings to Ba3 from B1.

The agency also affirmed TEP's Ba2 corporate family rating, Ba2-PD probability of default rating and speculative grade liquidity rating of SGL-3.

The outlook is stable.

Concurrently, Moody's changed Rockies Express Pipeline LLC's outlook to positive from stable and affirmed its Ba2 corporate family rating, Ba2-PD probability of default rating and Ba2 unsecured notes rating.

"TEP's issuance of new notes is effectively a debt neutral transaction as a substantial portion of the notes proceeds will be used to paydown the borrowings under its Senior Secured Revolving Credit Facility (RCF). Post the new notes issuance, TEP's $1.25 billion of outstanding senior unsecured notes, although subordinated to TEP's RCF, constitute a higher proportion of the total debt warranting only one notch difference between the CFR and the notes rating," Moody's senior analyst Sreedhar Kona said in a news release.

"REX's outlook change is a reflection of cash flow enhancing events over the past few quarters, including the completion of capacity expansion project and the breach of contract claim settlement with Ultra Resources Inc. (Ultra, B1 positive)."

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