Moody's rates Texas Petrochemicals loan Ba3

Moody's Investors Service said it assigned a Ba3 corporate family rating to Texas Petrochemicals LP and a Ba3 rating to its $280 million senior secured term loan facility. The outlook is stable.

Proceeds will be used to fund the upcoming purchase of Huntsman's U.S. butadiene and MTBE business. Texas Petrochemicals is also establishing a $115 million five-year senior secured revolving credit facility, which is not rated. This is the first time Moody's has rated the company since its emergence from bankruptcy.

The agency said the ratings reflect Texas Petrochemical's narrow product line, concentrated operational and geographic profile, single operating division structure and increased capital expenditures needed to bring facilities into NOx compliance.

The ratings are supported are the company's modest pro forma leverage and Moody's expectation that the company will enjoy more stable earnings due to contract pricing with a majority of its customers, which contractually insulates sales from feedstock, sales price and energy price fluctuations.

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