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TEXT-Fitch rates ClearBridge Energy MLP Fund notes 'AAA'
July 16, 2012 / 8:29 PM / 5 years ago

TEXT-Fitch rates ClearBridge Energy MLP Fund notes 'AAA'

July 16 - Fitch Ratings assigns an 'AAA' rating to the following senior
secured notes issued by ClearBridge Energy MLP Fund Inc. (NYSE: CEM), a
non-diversified, closed-end fund advised by Legg Mason Partners Fund Advisor,
LLC (LMPFA) and subadvised by ClearBridge Advisors, LLC (ClearBridge):

--$25,000,000 2.80% Series A Senior Secured Notes due July 12, 2015;
--$50,000,000 3.53% Series B Senior Secured Notes due July 12, 2019;
--$102,000,000 4.06% Series C Senior Secured Notes due July 12, 2022;
--$90,000,000 4.21% Series D Senior Secured Notes due July 12, 2024.

KEY RATING DRIVERS

The rating assignments reflect:

-- Sufficient asset coverage relative to Fitch's published criteria;
-- The structural protections afforded by mandatory de-leveraging provisions in
the event of asset coverage declines;
-- The legal and regulatory parameters that govern the fund's operations;
-- The capabilities of LMPFA and ClearBridge as investment advisor and
subadvisor. As of June 30, 2012, the fund's total assets were approximately $1.9
million.

DETAILS OF THE TRANSACTION
The closing date for the senior notes was July 12, 2012. The fund intends to use
the net proceeds from this offering to repay outstanding borrowings on a
floating rate line of credit, make new portfolio investments, and for general
corporate purposes.

LEVERAGE
After the deal closing, the fund's total leverage was approximately $477
million, not including accrued interest, or approximately 22% of the total
assets. The leverage comprised $267 million of senior secured notes and $210
million of outstanding bank borrowing.

ASSET COVERAGE
At the time of the issuance, the fund's asset coverage ratio for the newly
issued senior secured notes, as calculated in accordance with the Investment
Company Act of 1940 (1940 Act), exceeded 300%, which is the minimum asset
coverage required by the 1940 Act for such securities. Also, at the time of
issuance, the fund's asset coverage ratios with respect to the same securities,
as calculated in accordance with Fitch's 'AAA' overcollateralization (OC) test,
exceeded of 100%, which is the minimum asset coverage levels deemed consistent
with the rating assigned to the newly issued notes.

Should the asset coverage tests for the senior secured notes decline below their
minimum threshold amounts and are not cured in a pre-specified timeframe, the
governing documents require the funds to reduce the leverage in a sufficient
amount to restore compliance with the applicable asset coverage tests.

THE FUND
The fund commenced its operations on June 25, 2012. The fund's objective is to
provide a high level of total return with an emphasis on cash distributions. The
fund seeks to achieve its objective by investing primarily in master limited
partnerships (MLPs) in the energy sector, which are entities that derive at
least 50% of their revenues from the business of exploring, developing,
producing, gathering, transporting, processing, storing, refining, distributing,
mining or marketing natural gas, natural gas liquids, crude oil, refined
petroleum products or coal.

As of Nov. 30, 2011, the fund incurred a deferred tax liability in the amount of
$152.1 million. Under a stressed market scenario, the fund may have to liquidate
portfolio assets to restore its asset coverage ratios. If such a scenario
occurred, any currently existing unrealized gain would likely be eliminated or
significantly reduced as a result of asset price declines causing such
liquidation. Nonetheless, Fitch rating criteria expect the fund to account 10%
of the deferred tax liability as current liability for the purpose of
calculating OC coverage for the senior secured notes.

THE ADVISOR AND SUBADVISOR
LMPFA and ClearBridge are wholly owned subsidiaries of Legg Mason, Inc., a
global asset management firm with $627 billion in assets under management as of
May 31, 2012. ClearBridge is Legg Mason, Inc.'s largest equity manager with
approximately $56.6 billion in assets under management, including $3 billion in
energy MLPs, as of March 31, 2012. It provides clients with a diverse line of
equity-focused strategies in various investment options.

RATINGS SENSITIVITY
The ratings may be sensitive to material changes in the credit quality or market
risk profile of the fund. A material adverse deviation from Fitch guidelines for
any key rating driver could cause the ratings to be lowered by Fitch.

For additional information about Fitch closed-end fund ratings guidelines,
please review the criteria referenced below, which can be found on Fitch's
website.

Additional information is available at www.fitchratings.com. The ratings above
were solicited by, or on behalf of, the issuer, and therefore, Fitch has been
compensated for the provision of the ratings.

The sources of information used to assess these ratings were the public domain,
LMPFA, and ClearBridge.

Applicable Criteria and Related Research:
--'Rating Closed-End Fund Debt and Preferred Stock' (Aug. 16, 2011);
--'2012 Outlook: Closed-End Fund Leverage' (Dec. 19, 2011).

Applicable Criteria and Related Research:
2012 Outlook: Closed-End Fund Leverage
Rating Closed-End Fund Debt and Preferred Stock

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