Moody’s affirms BreitBurn, might lift QR Energy

Moody's Investors Service said it affirmed BreitBurn Energy Partners, LP's B1 corporate family rating, B1-PD probability of default rating and the B3 senior unsecured notes rating following the company's announced acquisition of QR Energy, LP.

The outlook remains stable.

At the same time, Moody's placed QR Energy's B2 corporate family rating, B2-PD probability of default rating and Caa1 rated senior unsecured notes under review for upgrade.

"BreitBurn's acquisition of QR Energy improves the company's scale and further diversifies its asset base, growing the company's footprint in certain high return plays such as the Permian Basin," Moody's analyst Arvinder Saluja said in a news release. "However, given the leveraging nature of the transaction and BreitBurn's already high debt level, it is critical that we see production and cash flow growth or equity issuance to support the capital structure and reduce leverage."

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