S&P drops MarkWest Energy debt

Standard & Poor's said it affirmed its B+ corporate credit rating on MarkWest Energy Partners LP and removed the rating from CreditWatch with negative implications.

At the same time, S&P said it lowered its rating on the company's existing $225 million senior unsecured debt to B- from B+, reflecting the company's significant use of its $500 million secured credit facilities for the acquisition of the Javelina gas processing and fractionation facility in Corpus Christi, Texas and the related subordination of unsecured debtholders.

The outlook is negative.

S&P noted the rating affirmation is premised on MarkWest's ability to execute its financing plan and restore leverage to below 50% in a timely manner.

The B- rating on the company's existing $225 million notes reflects the significant increase in proportion of secured debt to assets as a result of the Javelina transaction, S&P added, noting the firm has demonstrated its willingness to use secured debt at the disadvantage of unsecured holders.

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