Moody’s rates CVR Partners, notes B1

Moody's Investors Service said it assigned CVR Partners, LP a B1 corporate family rating and B1-PD probability of default rating.

The agency also assigned a B1 rating to the company’s proposed $625 million senior secured notes due 2023, in line with the corporate family rating because it is substantively the only debt in the capital structure.

The company is also proposing a $50 million ABL revolving credit facility that will be unrated.

Moody's also assigned an SGL-3 speculative grade liquidity rating to CVR.

The outlook is stable.

Proceeds from the notes will be used to repay the intercompany borrowings, that funded the April 1 East Dubuque acquisition, and to retire the outstanding tendered East Dubuque notes, as well as cover the tender premium and other transaction fees.

"CVR generates solid EBITDA margins that drive good operating cash flows. The company also benefits from its two production facilities, which provide diversity of earnings and feedstocks, as well as market access to the mid-corn belt and southern plains. While the MLP structure will demand regular cash distributions, we expect CVR to manage liquidity needs prudently in the currently challenged nitrogen markets that could persist through 2017," Lori Harris, Moody's assistant vice president and lead analyst for CVR, said in a news release.

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