DCR Assigns BBB+ Rating to Sweeny Notes

Duff & Phelps Credit Rating Co. has assigned its preliminary BBB+ rating to the US$300mn senior note issuance by the Merey Sweeny Limited Partnership joint venture and the Sweeny Funding Corp. special project venture. The issuance of the notes, due 2019, will help finance the construction of a delayed coker, vacuum tower and related processing facilities at the Sweeny petrochemical complex in Texas, which is controlled 50-50 by Phillips Petroleum and Venezuela's state oil company PDVSA. The Merey-Sweeny project is a US$538mn upgrade and improvement program to the Sweeny refinery to allow Phillips to process lower-cost, heavy sour crude oil from PDVSA. To finance the project, Phillips and PDVSA will co-issue a total of US$430mnin senior debt, approximately 80% of the total project costs. Some US$130mn will be financed by senior unsecured bank debt with the remaining US$300mn by Rule 144A senior notes due in 2019. Total sponsor equity will amount to US$107.5mn, approximately 20% of the total project costs. Earlier this month credit rating agency Moody's assigned the US$300mn senior notes issuance its Baa1 rating.