Moody's rates Kinder Morgan SGL-2

Moody's Investors Service said it assigned an SGL-2 speculative grade liquidity rating to Kinder Morgan, Inc. following its debt ratings being downgraded to speculative-grade status in May with the consummation of its leveraged management buyout.

The SGL-2 rating indicates good liquidity for the next four quarters, the agency said, reflecting good coverage of cash needs through internal cash flow, good sources of alternate liquidity, adequate covenant compliance and "back door" sources of liquidity.

Kinder Morgan has $7.3 billion of committed credit facilities, including a $1 billion revolver, which Moody's said should allow the company to comfortably meet its foreseeable liquidity needs. The credit facility contains a single financial covenant, a debt-to-EBITDA calculation with a limit of 8.75x. The ratio is currently 7.6x.

Moody's rates Noranda floaters Caa1

Moody's Investors Service said it assigned B2 corporate family and probability-of-default ratings and an SGL-1 speculative grade liquidity rating to Noranda Aluminum Holding Corp. and a Caa1 (LGD6, 93%) rating to its proposed $220 million senior unsecured floating-rate notes.

The agency also affirmed Noranda Aluminum Acquisition Corp.'s $250 million secured guaranteed revolving credit agreement and $500 million secured, guaranteed term loan B at Ba2 (LGD2, 22%) and its $510 million senior unsecured guaranteed floating-rate notes due 2015 at B3 (LGD5, 71%).

The outlook is stable.

The proceeds of the holding company debt will be used to distribute a special dividend to Noranda's equity sponsor, Apollo Management LP, and to cover related fees and expenses.

The agency said the effective downgrade of the group's corporate family rating reflects the introduction of debt at the holding company and the increase in absolute debt levels for a company in a cyclical commodity industry.

The ratings continue to reflect Noranda's limited size, relatively high leverage, exposure to a single commodity-priced product and its higher cost base compared to many of its integrated competitors, Moody's said.

Positive factors supporting the ratings include the earnings and cash flow stability provided by the company's significant hedged aluminum position through 2008, its captive bauxite and alumina production through its joint venture, which fully supplies its primary input requirements, and the company's position in value-added aluminum products.

The debt-to-EBITDA ratio was roughly 3.8x at the end of 2006.

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