S&P rates Consolidated Energy notes BB-

Standard & Poor's said it assigned its preliminary BB corporate credit rating on Consolidated Energy Ltd.

At the same time, the agency assigned a preliminary BB- issue-level rating to Consolidated Energy’s proposed issuances of up to $1.05 billion Rule 144A five-year fixed-rate senior unsecured notes and up to $200 million Rule 144A five-year floating-rate senior unsecured notes through its wholly owned financing vehicle, Consolidated Energy Finance, SA.

The outlook is positive.

The assigned ratings are subject to the successful issuance of the notes and the completion of the acquisition of Methanol Holding (Trinidad) Ltd. with the proceeds.

S&P expects the company to use net proceeds from the notes issuance to acquire the 56.53% remaining equity shares of Methanol Holding, which the Trinidadian government is currently holding, for a purchase price of about $1.25 billion. The senior unsecured notes would be rated one notch below the corporate credit rating, reflecting the subordination coming from the existence of secured debt for about $700 million at the level of the operating companies, the agency said.

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