S&P puts TransMontaigne on positive watch

Standard & Poor's said it placed TransMontaigne Inc.'s B+ corporate credit rating on CreditWatch with positive implications following the announcement that Morgan Stanley Capital Group Inc. has offered to acquire all the outstanding equity securities of TransMontaigne for $8.50 per share (roughly $375 million) pending the completion of due diligence. TransMontaigne is currently reviewing the offer.

As part of the supply agreement TransMontaigne entered into with Morgan Stanley Capital Group in late 2004, Morgan Stanley received warrants to purchase 5.5 million shares of TransMontaigne's common stock, which represents Morgan Stanley's current 10% ownership. S&P said the CreditWatch positive listing for TransMontaigne reflects Morgan Stanley's superior credit strength and the strong likelihood for a ratings upgrade if the acquisition is successful.

The ratings on TransMontaigne reflect its more volatile supply, marketing and trading business, and debt leverage, offset by a mix of a stable terminaling business and the stability provided by its long-term supply agreement for refined products, the agency said.

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