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.

Energy midstream

El Paso Corp., B2; probability-of-default rating: B2; revolver and deposit loan facility, upgraded to Ba3 from B1, LGD2, 26%; notes, B2, LGD4, 52%. El Paso Performance-Linked Trust, performance-linked trust securities, B2, LGD4, 52%. El Paso Energy Capital Trust I, trust convertible preferred securities, downgraded to Caa1 from B3, LGD6, 96%. El Paso Tennessee Pipeline Co., debentures, B2, LGD4, 52%. ANR Pipeline Co., Colorado Interstate Gas Co., El Paso Natural Gas Co., Southern Natural Gas Co. and Tennessee Gas Pipeline Co., Ba1; probability-of-default ratings: Ba2; notes, upgraded to Ba1 from Ba2, LGD3, 36%. El Paso Exploration & Production Co., Ba3; probability-of-default rating: Ba3; notes, B1, LGD4, 61%.

EPCO Holdings, Inc., Ba1; probability-of-default rating: Ba1; revolver and term loan, upgraded to Ba2 from Ba3, LGD6, 92%.

MarkWest Energy Partners, LP, B1; probability-of-default rating: B1; notes, B2, LGD4, 70%. MarkWest Operating Co., LLC, revolver and term loan, upgraded to Ba1 from Ba3, LGD2, 15%.

MGG Midstream Holdings, LP, Ba1; probability-of-default rating: Ba1; term loan, upgraded to Ba2 from Ba3, LGD6, 93%.

Niska Gas Storage, Ba3; probability-of-default rating: Ba3. AECO Gas Storage, revolver, Ba3, LGD4, 50%. Niska Gas Storage Canada ULC, term loan, Ba3, LGD4, 50%. Niska Gas Storage US, LLC, revolver and term loan, Ba3, LGD4, 50%.

Regency Gas Services LP, B1; probability-of-default rating: B1; revolver and tem loan, B1, LGD3, 33%.

SemGroup, LP, Ba3; probability-of-default rating: Ba3; notes, B1, LGD5, 79%; revolver and term loan, upgraded to Ba2 from Ba3, LGD3, 41%. SemCams Holding Co., term loan, upgraded to Ba2 from Ba3, LGD3, 41%.

Targa Resources, Inc., Ba3; probability-of-default rating: Ba3; term loan, bank facility, revolving bank facility and letter-of-credit facility, Ba3, LGD3, 50%; bonds, B2, LGD6, 93%.

Vulcan Energy Corp., Ba1; probability-of-default rating: Ba1; revolver and term loan, Ba2, LGD6, 95%.

The Williams Cos., Inc., Ba2; probability-of-default rating: Ba2; notes, bonds and debentures, Ba2, LGD4, 59%; senior unsecured shelf, prospective Ba2, LGD4, 59%; subordinated shelf, upgraded to prospective B1 from prospective Ba3, LGD6, 96%; preferred stock shelf, prospective B1, LGD6, 97%. Williams Gas Pipeline Co. LLC, Ba1; probability-of-default rating: Ba2. Williams Production RMT Co., Williams Holdings of Delaware, Inc., Mapco Inc. and Transco Energy Co., notes, Ba1, LDG3, 35%. Northwest Pipeline Corp., and Transcontinental Gas Pipe Line Corp., notes, Ba1, LDG3, 35%; senior unsecured shelf, prospective Ba1, LGD3, 35%. Williams Partners LP, Ba3; probability-of-default rating: Ba2; notes, Ba3, LGD4, 67%.

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