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Moody's rates Plains All American Pipeline notes Ba1
Moody's Investors Service said it assigned a Ba1 rating to Plains All American Pipeline LP's proposed senior unsecured guaranteed notes.
The ratings remain on review for upgrade, with completion of the review expected in first quarter 2004.
Moody's said expected note proceeds of just under $200 million would repay part of the company's $410 million of Dec. 2 borrowings under its new bank facilities, including a $47 million fourth quarter 2003 Canadian acquisition. Total pro forma effective debt at Dec. 2, 2003 approximates $640 million, including $400 million of senior notes, $209 million of bank borrowings, and roughly $30 million of debt temporarily repaid with advanced payment proceeds from one refining customer.
Moody's said the ratings are supported by rising scale and regional diversification; reduced volatility due to the rising scale of fee-based versus the more volatile trading and marketing business, and (due to rising scale elsewhere) the reduced impact on the company's EBITDA and All-American Pipeline throughput from declining Point Arguello and Santa Ynez offshore California production; reduced leverage; and new Basin pipeline volumes captured by the company's Rancho line shutdown. These gains were mostly acquisition-driven and funded adequately by units offerings.
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