S&P rate Southern Star notes BBB-

S&P said it assigned a BBB- rating to Southern Star Central Corp.’s and Southern Star Central Gas Pipeline Inc.’s (operating company) proposed $400 million of senior unsecured notes.

The company plans to use the proceeds to repay $200 million of its 5 1/8% senior unsecured notes due 2022 and the $80 million operating company term loan, as well as some amounts outstanding on its credit agreement.

The result will be a marginal increase in leverage, S&P said.

S&P also affirmed the BBB- issuer credit rating on Southern Star and the BBB- issue-level rating on the company’s and the operating company’s senior unsecured debt.

The outlook is stable

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