Moody's rates Targa loans Ba3, B3

Moody's Investors Service said it affirmed Targa Resources, Inc.'s B1 corporate family rating and assigned Ba3 ratings (LGD3, 40%) to its proposed first-lien credit facilities, comprising a $1.525 billion term loan and a $300 million revolving credit facility, and a B3 rating (LGD5, 88%) to its proposed $350 million second-lien term loan.

The outlook remains negative.

Proceeds will be used to refinance Targa debt, including funding a tender offer for its 8½% senior unsecured notes due 2013, and to fund a $414 million distribution to shareholders.

Targa's corporate family rating reflects its sizable operating footprint and market position, Moody's said.

But Targa is more leveraged than its peers at about 6 times debt to EBITDA, the agency noted.

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