S&P rates Southcross loan B

Standard & Poor’s said it assigned a B corporate credit rating to Southcross Energy Partners LP.

The agency also said it assigned a B rating and 3 recovery rating to the $450 million term loan facility due 2021 and $120 million senior secured revolving credit facility due 2019.

The partnership is expected to use the proceeds of the term loan to partially fund the purchase of the Rich Gas System from its parent, Southcross Holdings LP and to pay down the balance of its existing revolving credit facility, S&P said.

The 3 recovery rating indicates 50% to 70% expected default recovery.

The outlook is stable.

The ratings reflect the company’s weak business risk profile and aggressive financial risk profile, the agency said.

The ratings also consider the partnership’s limited scale and geographic scope, which is only partially offset by its high percentage of fee-based cash flow, S&P said.

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