S&P ups some QR Energy ratings

Standard & Poor’s said it removed its ratings on QR Energy LP from CreditWatch where they were placed with positive implications on July 29 following Breitburn Energy Partners LP’s announcement that it would acquire QR for about $3 billion, including assumed debt.

“We are raising the corporate credit rating on QR to B+ (same as Breitburn) from B. In addition, we are affirming the B- senior unsecured ratings of QR (same as Breitburn) and revising the recovery rating to 6 (same as Breitburn), reflecting our expectation of negligible (0% to 10%) recovery if a payment default occurs, from 5. The outlook is negative.

QR’s credit facility was repaid in full at the close of the merger, and S&P expects QR’s $300 million notes due 2020 to be redeemed by Dec. 22.

The upgrade of QR Energy’s corporate credit rating and affirmation of the senior unsecured rating reflect its acquisition by Breitburn and S&P’s assessment of QR as a “core” subsidiary.

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