Moody's rates LB Pacific loan B1

Moody's Investors Service said it assigned a B1 rating to LB Pacific LP's $170 million term loan B, to be secured by 34.6% of the subordinated equity units of Pacific Energy Partners LP's and by the equity of Pacific Energy GP LLC, which holds the 2% general partner interest in the company.

Moody's affirms LB Pacific's Ba2 senior unsecured note and Ba1 senior implied ratings and stable outlook.

Moody's said the ratings reflect LB Pacific's near total dependence on cash flow from a subordinated equity security; resulting structural subordination of cash flow, exacerbated by the subordinated units' junior position relative to common units, the lack of security in the 2% general partner interest and the fact that private market valuations of subordinated units relative to common units is evolving.

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