Moody's rates Inergy notes B1

Moody's Investors Service said it assigned a B1 (LGD4, 64%) rating to Inergy, LP's $200 million proposed senior unsecured notes offering that will be used to pay down borrowings under the company's senior secured revolving credit facility.

The agency affirmed the company's Ba3 corporate family and probability-of-default ratings, B1 (LGD4, 64% from 67%) rating on its senior notes and the SGL-3 rating.

The outlook remains stable.

Moody's said the affirmation of the Ba3 corporate family rating reflects the company's position as the fifth largest distributor of propane in the United States and relative durability of the company's cash flows from that business.

The Ba3 rating also reflects the increased business and seasonal diversification from the company's growing natural gas storage operations in the Northeastern United States and the stability of the cash flow generated from that business, the agency said.

Adjusted debt-to-EBITDA ratio rose to 4.1x after the U.S. Salt acquisition in August 2008, which is on the high end for the rating, but still within the range acceptable, the agency noted.

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