Moody's lowers TransMontaigne

Moody's Investors Service said it downgraded the ratings of TransMontaigne Partners LP, including its corporate family rating to B1 from Ba3, probability of default rating to B1-PD from Ba3-PD and the rating on its senior unsecured notes to B3 (LGD 5) from B2 (LGD 5).

Moody's also said it affirmed the company's SGL-3 speculative grade liquidity rating.

The downgrades follow the acquisition by an affiliate of ArcLight Energy Partners Fund VI, LP of TransMontaigne's publicly held common units not previously held by ArcLight Energy Partners Fund VI, the agency explained.

The outlook is stable.

The new $525 million term loan at TransMontaigne's holding company used to fund the acquisition increases the amount of debt serviced by the company's cash flow, the agency said.

The ratings also reflect TransMontaigne's stable nature of cash flows, large proportion of fee-based revenues under take-or-pay contracts and diversity of operations in multiple U.S. regions, Moody's said.

The company enjoys strong market positions in niche markets that have limited competition and significant barriers to entry, the agency added.

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