S&P rates Inergy notes B+

Standard & Poor's said it assigned a B+ rating to Inergy LP's $200 million senior unsecured notes due 2015 with 5 recovery rating. The corporate credit rating of BB- was affirmed.

The outlook remains stable.

Proceeds will be used to refinance debt on Inergy's revolving acquisition credit facility.

The rating reflects the partnership's weak business risk profile and aggressive financial profile, the agency said.

Concerns include the propane business's exposure to weather, seasonal demand patterns, customer conservation, exposure to volatile commodity prices, the partnership's aggressive growth strategy and the master limited partnership structure, the agency noted.

"These concerns are partially offset by the propane segment's high percentage of residential customers in attractive markets, improving per-gallon margins and Inergy's growing midstream business that provides more stable cash flows," S&P analyst Michael Grande said in a statement.

Total debt-to-EBITDA ratio is about 3.5x.

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