Moody’s applies B1 to Genesis Energy notes

Moody's Investors Service said it assigned a B1 rating to Genesis Energy LP's (GEL) proposed $550 million senior unsecured notes due 2025.

Net proceeds will be used to fund a portion of the purchase price for Genesis Energy’s pending $1.325 billion acquisition of Tronox Ltd.’s soda ash business. The company intends to fund the remaining portion of the acquisition, which is expected to close in the second half 2017, with a $750 million preferred equity issuance and drawings under its revolving credit facility.

Genesis Energy’s ratings and negative outlook are unchanged, including its Ba3 corporate family rating.

"The company's decision to fund the acquisition with 55% preferred equity and 45% debt will allow the company to reduce leverage on a pro forma basis by close to half of a turn," Moody's vice president James Wilkins said in a news release.

"However, GEL's leverage metrics still remain elevated."

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