Moody’s affirms Tallgrass Energy

Moody's Investors Service said it affirmed Tallgrass Energy Partners, LP's (TEP) Ba2 corporate family rating, Ba2-PD probability of default rating and Ba3 senior unsecured notes rating.

The speculative grade liquidity rating of SGL-3 was also affirmed.

The outlook is stable.

In March, Tallgrass Energy GP, LP (TEGP, unrated) and TEP announced an agreement for TEGP to acquire TEP's publicly held common units. As a result of the proposed transaction, the TEP common units will no longer be publicly traded and 100% of the equity interests of TEP will be owned by TEGP's subsidiary, Tallgrass Equity, LLC.

Following the transaction, which is expected to close by the end of the second quarter, TEGP will be renamed as Tallgrass Energy, LP and will trade as TGE.

Additionally, Moody's upgraded Rockies Express Pipeline LLC's (REX) ratings, including its corporate family rating to Ba1 from Ba2.

"TEP benefits from improvement in the credit profile of REX (a substantial cash flow contributor to TEP), simplification of corporate structure and developments around PONY's service area," Moody's senior analyst Sreedhar Kona said in a news release.

"However, TEP's ratings improvement will require the company to further extend its contracted cash flow visibility at PONY and demonstrate a path to financial leverage reduction."

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