Moody's rates El Paso loan B3

Moody's Investors Service said it confirmed the debt ratings of El Paso Corp. (B3 senior implied), its other corporate level issuers, and pipeline subsidiaries with a stable outlook. The speculative grade liquidity rating is confirmed SGL-3.

Moody's also confirmed a B3 rating to El Paso's existing credit facility and assigned a B3 rating to its proposed $3 billion secured credit facility.

According to Moody's, the rating confirmations acknowledge El Paso's sizable available liquidity that appears adequate to meet its foreseeable near-term cash obligations and affords it some time to restructure its credit. Moody's said it anticipates the renewal of El Paso's credit facility later this month, an important step in this regard. The rating actions also recognize the company's progress in its asset sale program that has allowed the company to ease its debt burden, sustain a large liquidity position, reduce its working capital needs, and improve its business risks.

However, El Paso's ratings are restrained, the agency said, by its high leverage that is unlikely to go down to any significant degree from organic means, given the lack of post-capex free cash flow.

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