Moody's rates StoneMor's notes B3

Moody's Investors Service said it assigned StoneMor Partners LP and its wholly owned subsidiary StoneMor Operating LLC a B2 corporate family rating, a B3 rating (LGD4, 67%) to $150 million of proposed senior notes and an SGL-3 speculative grade liquidity rating.

The outlook is stable.

Proceeds are expected to be used to repay existing secured debt.

StoneMor's B2 corporate family rating is constrained by a relatively small revenue base for the rating category, a high cash distribution policy consistent with the MLP structure and the risk that declining death rates and weak consumer spending could hur pre-need and at need cemetery sales, the agency said.

Ratings are supported by the second-largest portfolio of cemetery properties in the United States, a track record of steady cash flow generation and solid growth in pre-need cemetery contracts during 2009 despite economic headwinds, the agency noted.

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