Moody’s rates Targa preferreds Ba3

Moody's Investors Service said it assigned Ba3 to Targa Resources Partners LP's proposed series A cumulative redeemable perpetual preferred units.

Concurrently, the agency affirmed all other ratings of Targa, including the Ba1 corporate family rating, Ba1-PD probability of default rating, Ba2 senior unsecured note ratings and SGL-3 speculative grade liquidity rating.

The outlook remains stable.

Net proceeds from the preferreds will be used to reduce the borrowings outstanding under the partnership's $1.6 billion senior secured revolving credit facility and for general corporate purposes.

"The issuance of preferred units enables Targa to term out borrowings under its revolver and improves financial flexibility to invest in its major growth projects in 2015-2016," Moody's vice president and senior analyst Arvinder Saluja said in a news release.

"However, the persistent weakness in the NGL and crude oil markets weighs on Targa's EBITDA generation and offsets the modest improvement in near-term credit metrics triggered by the issuance of preferred units to reduce funded debt."

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