Moody's rates Atlas notes B2

Moody's Investors Service said it assigned a B2 (LGD4, 64%) rating to Atlas Pipeline Partners, LP's proposed $325 million senior notes due 2021. The stable outlook is unchanged.

Proceeds will be used to finance a portion of the $1 billion purchase price of Teak Midstream, LLC and for general corporate purposes.

The agency said Atlas Pipeline's B1 corporate family rating reflects its growing but still relatively limited scale and concentrated operations in the Mid-continent region, the inherent price and volume risks of its core gathering and processing business and the risk of its master limited partnership organizational structure. The rating also considers the execution and funding risks involving the ongoing capacity expansion projects and the two recent acquisitions (Teak and Cardinal Midstream, LLC).

The corporate family rating is supported by the partnership's growing EBITDA, increasing fee-based cash flows, long-term contracting arrangements and the routine practice of hedging its commodity price exposure associated with the percentage of proceeds and keep-whole contracts, Moody's said.

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