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S&P rates TXU unit's notes BBB
Standard & Poor's said it has assigned its BBB long-term issue rating to the US$300 million 144A guaranteed senior notes to be issued by TXU Australia Holdings Pty Ltd., a wholly owned subsidiary of TXU Australia Holdings (Partnership) LP (BBB/negative/A-2).
The notes, due to mature on Nov. 15, 2013, and guaranteed by TXU Australia Holdings (Partnership) LP, will be senior unsecured and unsubordinated obligations of TXU Australia Holdings Pty Ltd., and will rank equally with all other existing and future unsecured and unsubordinated debt of TXU Australia Holdings Pty Ltd.
Proceeds from the notes will be used to refinance a portion of a A$1.75 billion syndicated bank facility at the TXU Australia Holdings (Partnership) LP level, which is due to mature in October 2004 and is currently drawn to A$1.37 billion.
"The refinancing of a portion of the TXU Australia group's syndicated bank facility goes some way to addressing one of the more immediate risks faced by the company," said S&P credit analyst Laurie Conheady, associate director, Corporate & Infrastructure Finance Ratings. "The current draw down under the syndicated bank facility represents close to half the group's outstanding debt; therefore, a reduction in its obligations under the facility will reduce what was looming as a significant refinancing risk in 2004.
"The use of long-dated paper further improves the company's debt-maturity profile and capital structure, while also diversifying its funding sources."
Furthermore, the ratings on TXU Australia Holdings (Partnership) LP are influenced by the close relationship the Australian group has with its U.S. parent, TXU Corp. (BBB/negative/NR).
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