Moody’s assigns Tallgrass notes B1

Moody’s Investors Service said it assigned a B1 rating to Tallgrass Energy Partners, LP’s proposed $500 million of senior unsecured notes due 2030. Tallgrass is a wholly owned subsidiary of Prairie ECI Acquiror LP through which Prairie conducts its operations.

Tallgrass’ notes, including the proposed notes, are rated B1, the same as Prairie’s B1 CFR. “Although the notes are subordinated to TEP’s $2.25 billion senior secured revolving credit facility (unrated), which has a senior secured priority claim to TEP’s assets, the notes are in a structurally superior position within the capital structure and have a priority claim to the assets compared to Prairie’s $1.5 billion senior secured term loan,” Moody’s said in a press release.

The notes are being offered to fund a tender for Tallgrass’ existing senior unsecured notes due 2023.

“Moody’s views this transaction as credit neutral as the overall debt burden of Prairie remains mostly unchanged and the nearest term maturity is being refinanced,” the agency said. All other ratings of TEP and its parent company, Prairie are unchanged, including its B1 corporate family rating.

The stable outlook is also unchanged.

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