Moody’s assigns Ba3 to Targa notes

Moody's Investors Service said it assigned a Ba3 rating to Targa Resources Partners LP's (TRP) proposed $750 million notes due 2028.

TRP is wholly owned by Targa Resources Corp. (Targa).

Targa and TRP's other ratings and Targa's stable outlook are unchanged.

Note proceeds will be used to finance the redemption of TRP's $250 million notes due 2018 and to repay borrowings under its revolver.

TRP's proposed and existing senior notes are unsecured and the creditors have a subordinated claim to TRP's assets behind the senior secured revolving credit facility and the accounts receivable securitization facility.

Moody's said it believes the Ba3 rating, one notch below Targa's Ba2 corporate family rating, better reflects the substantial amount of priority-claim secured debt in the capital structure and the likelihood of increased use of the revolver than what is suggested by Moody's Loss Given Default (LGD) methodology.

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