Moody’s rates SemGroup notes B2

Moody's Investors Service said it assigned a B2 rating to SemGroup Corp.’s proposed senior unsecured notes due 2025.

Proceeds will be used to retire SemGroup's $300 million senior unsecured notes issue maturing in 2021 pursuant to a simultaneously announced tender offer.

The B1 corporate family rating, B1-PD probability of default rating, SGL-3 speculative grade liquidity rating and stable outlook are not affected by this action.

"Moody's views the notes issue as an ongoing exercise in managing SemGroup's financial flexibility, reducing its interest burden and extending debt maturities," Moody's vice president John Thieroff said in a news release.

The B2 rating on the senior unsecured notes reflects their subordinate position relative to the company's $1 billion secured credit facility in the capital structure, the agency explained. The potential priority secured claim of the revolver relative to the notes results in the unsecured notes being rated one notch beneath the B1 corporate family rating under Moody's Loss Given Default Methodology.

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