Moody's introduces new ratings

Moody's Investors Service has introduced two new ratings: probability-of-default ratings and loss-given-default ratings.

The agency's current long-term credit ratings are opinions about expected credit loss that incorporate both the likelihood of default and the expected loss in the event of default. The loss-given-default rating methodology will disaggregate these two key assessments in long-term ratings. The agency said the methodology will also enhance the consistency in its notching practices across industries and will improve the transparency and accuracy of its ratings, as Moody's research shows that credit losses on bank loans have tended to be lower than those for similarly rated bonds.

Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha-numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations.

Loss-given-default assessments (or LGDs) are assigned to individual rated debt issues - loans, bonds and preferred stock - and express Moody's opinion of expected loss as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0%-9%) to LGD6 (loss anticipated to be 90%-100%).

Below is a list of the rating actions for Moody's rated companies, sorted by industry. The rating immediately after the company name denotes the corporate family rating and the percentages next to the LGDs represent the expected loss-given-default rates.

AmeriGas Partners, LP, Ba3; possibility-of-default rating: Ba3; notes, B1, LGD5, 71%.

Atlas Pipeline Partners, LP, B1; possibility-of-default rating: B1; notes, downgraded to B2 from B1, LGD5, 71%.

Copano Energy, LLC, B1; possibility-of-default rating: B1; notes, B2, LGD5, 72%.

Ferrellgas Partners LP, Ba3; possibility-of-default rating: Ba3; notes, B2, LGD6, 91%. Ferrellgas, LP, notes, Ba3, LGD3, 44%.

Holly Energy Partners, LP, Ba3; possibility-of-default rating: Ba3; notes, downgraded to B1 from Ba3, LGD4, 62%.

Inergy, LP, Ba3; possibility-of-default rating: Ba3; notes, B1, LGD4, 67%.

MxEnergy Holdings Inc., B3; possibility-of-default rating: B3; notes, Caa1, LGD5, 77%.

Semco Energy, Inc., Ba2; possibility-of-default rating: Ba3; notes, Ba2, LGD3, 37%.

Southern Star Central Corp., Ba1; possibility-of-default rating: Ba1; notes, upgraded to Ba2 from Ba3, LGD5, 80%.

Star Gas Partners, LP, Caa1; possibility-of-default rating: Caa1; notes, Caa3, LGD5, 85%.

Suburban Propane Partners, LP, Ba3; possibility-of-default rating: Ba3; notes, B1, LGD5, 78%.

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