fung_derf
9年前
Fitch Ratings-New York-01 May 2015: Fitch Ratings has upgraded the Issuer Default Rating (IDR) and senior unsecured ratings for Regency Energy Partners, LP (RGP) to 'BBB-' from 'BB' following the close of RGP's merger with Energy Transfer Partners, LP (ETP) and removed RGP from Rating Watch Positive. Fitch has also upgraded RGP's series A preferred units to 'BB' from 'B+' and upgraded and withdrawn the rating for RGP's senior secured revolver following the termination of the revolver.
In addition, Fitch has affirmed ETP's 'BBB-' IDR and senior unsecured rating and its junior subordinated notes rating at 'BB'. Fitch has also affirmed Panhandle Eastern Pipe Line Co.'s (Panhandle) Issuer Default Rating (IDR) and senior unsecured rating at 'BBB-' and its junior subordinated notes at 'BB'. The Ratings Outlook for all of the entities is Stable. A full list of today's actions follows at the end of this release.
The upgrade of RGP's debt reflects the guarantees on the senior notes put in place by ETP. The withdrawal of the senior secured rating reflects the termination of RGP's senior secured revolver. Fitch believes that with RGP's acquisition, and its debt guaranteed and assumed by its higher rated affiliate, RGP's notes and IDR should be rated at ETP's rating.
The affirmation of ETP's rating and Stable Outlook reflects Fitch's belief that the transaction provides ETP with significant benefits, including increased size and scale, a robust platform for growth, increased geographic exposure to the Marcellus and Utica shale in particular, and the opportunity for a fair amount of what should be easily achievable synergies.
Prior to the transaction Fitch's expectations for leverage at ETP for 2015 and 2016 was a range of 4.0x to 4.5x. Pro forma for the transaction, leverage metrics are expected by Fitch to remain within these ranges through 2015 - 2016. To the extent that leverage was expected to be meaningfully above 4.5x on a sustained basis, Fitch would likely take a negative rating action. Leverage above 5.0x would likely lead to at least a one notch downgrade.
KEY RATINGS DRIVERS
Increased Size, Scale and Diversity: Recent mergers and growth projects at ETP have resulted in a larger, more diversified, and generally stronger partnership. ETP's percentage of contractually supported fee-based margins has gradually increased. The recently announced merger between ETP and RGP should provide ETP with increased cash flows driven by expected synergies and improved returns on growth projects previously planned at RGP. As mentioned, ETP should benefit from the increased size and scale, an increased project backlog, and increased geographic exposure, particularly in West Texas and the Marcellus and Utica shales. With ETP's merger with RGP and its interests in Sunoco, LP (SUN; rated 'BB'/Stable Outlook by Fitch) and Sunoco Logistics LP (SXL; 'BBB'/Stable Outlook), ETP's operating assets and retail platform provide further diversified geographic and business line exposure and a major platform for growth within most of the major U.S. production regions.
Moderate Leverage Metrics: Fitch expects ETP's adjusted consolidated debt/EBITDA should range between 4.0x to 4.5x in 2015 and 2016. If leverage were to be meaningfully above 4.5x on a sustained basis, Fitch would likely take a negative rating action.
Liquidity is Adequate: ETP has access to a $3.75 billion unsecured five-year revolving credit facility that matures in November 2019. As of March 3, 2015, there was a balance of $2.2 billion in revolving credit loans outstanding under ETP's revolving credit facility, and there were $122 million of letters of credit outstanding. Proceeds from a March 5 $2.5 billion note offering were used in part, to repay credit facility borrowings. The credit facility contains a financial covenant that provides that on each date ETP makes a distribution, the leverage ratio, as defined in the credit agreement, shall not exceed 5.0x, with a permitted increase to 5.5x during a specified acquisition period, as defined in the credit agreement. ETP is currently in compliance with this covenant.
Modest Commodity Price Exposure: Pro-forma for the merger ETP expects that roughly 76% of its cash flows are either fee based or hedged for 2015 (71% fee/5% hedged). As such even in the current weak commodity price environment expectations are that cash flows remain relatively stable.
Other Rating Considerations: ETP's structural subordination to subsidiary debt and uncertainties resulting from potential future structural changes are also considered. The potential effect on pipeline system utilization and related re-contracting risk resulting from changing natural gas supply dynamics is a longer-term concern.
Panhandle
Parent Company Affiliation: The rating affirmation reflects Panhandle's affiliation with Energy Transfer Partners, LP (ETP; IDR: 'BBB-'/Stable Outlook) and expectations that ETP will continue to manage Panhandle's credit metrics and liquidity needs at levels appropriate to support its 'BBB-' rating. Panhandle is a wholly-owned subsidiary of ETP. Panhandle was merged with Southern Union Company (SUG) last year, with all of SUG's and Panhandle's notes becoming pari passu. Fitch does not expect any additional material transactions or growth initiatives at Panhandle and expects that future debt maturities will be financed through issuance at the ETP level. ETP is expected to provide any liquidity needs to Panhandle and refinance any Panhandle maturities at the ETP level and take any excess cash flow to use at ETP. Panhandle's standalone credit profile is consistent with a 'BBB-' or better IDR; however, given their strategic, operational and legal ties, Fitch believes it appropriate to link Panhandle's ratings with those of its parent, ETP. An upgrade or downgrade at ETP would likely lead to an upgrade or downgrade at Panhandle.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for the issuer include:
--WTI oil price that trends up from $50/barrel in 2015 to $60/barrel in 2016 and a long-term price of $75/barrel; and Henry Hub gas that trends up from $3/mcf in 2015 to $3.25/mcf in 2016 and a long-term price of $4.50/mcf consistent with Fitch's published Base Case commodity price deck;
--Moderate revenue growth on existing assets;
--Balanced funding with both debt and equity of growth capital spending and acquisitions
RATINGS SENSITIVITIES
Positive: Future developments that may, individually or collectively, lead to a positive rating action include:
ETP
--A material improvement in credit metrics with ETP adjusted leverage sustained at between 3.5x and 4.0x;
--A lessening of consolidated company business risk as ETP acquires and expands fixed-fee operations.
Negative: Future developments that may, individually or collectively, lead to a negative rating action include:
ETP
--Weakening credit metrics with ETP leverage above 5.0x on a sustained basis would likely lead to a downgrade to BB+;
--Increasing commodity price exposure above 30% could lead to a negative ratings action.
The following ratings have been upgraded by Fitch with a Stable Outlook:
Regency Energy Partners, LP
--Long-term IDR to 'BBB-' from 'BB';
--Senior unsecured notes to 'BBB-' from 'BB';
--Series A preferred units to 'BB' from 'B+';
--Senior secured revolver to 'BBB-' from 'BB+' and withdrawn.
Fitch has affirmed the following ratings with a Stable Outlook:
Energy Transfer Partners, L.P.
--IDR at 'BBB-';
--Senior unsecured debt at 'BBB-';
--Junior subordinated debt at 'BB'.
Panhandle Eastern Pipe Line Co.
--IDR at 'BBB-';
--Senior unsecured debt at 'BBB-';
--Junior subordinated debt at 'BB'.
Contact:
Primary Analyst
Peter Molica
Senior Director
+1-212-908-0288
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10004
Kathleen Connelly
Director
+1-212-908-0290
Committee Chairperson
Robert Curran
Managing Director
+1-212-908-0515
Media Relations: Alyssa Castelli, New York, Tel: +1 (212) 908 0540, Email: alyssa.castelli@fitchratings.com; Elizabeth Fogerty, New York, Tel: +1 (212) 908 0526, Email: elizabeth.fogerty@fitchratings.com.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=984049
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.
(END) Dow Jones Newswires
May 01, 2015 14:13 ET (18:13 G
Timothy Smith
11年前
Regency Energy Partners LP (RGP) will report results of operations for 2Q 2013 around August 8, 2013. This article focuses on some of the developments investors should be watching for.
2Q13 will include 2 months of contributions from RGP's acquisition of Southern Union Gathering Company, LLC, the owner of Southern Union Gas Services, Ltd. ("SUGS"), from a jointly owned affiliate of Energy Transfer Equity, L.P. (ETE) and Energy Transfer Partners, L.P. (ETP).
The ~$1.5 billion acquisition closed on April 30, 2013 and will significantly expand RGP's presence in the Permian Basin (west Texas). SUGS will be folded into the Gathering and Processing segment.
Penny Roger$
13年前
Regency Energy Partners LP is engaged in the gathering, treating, processing, compression and transportation of natural gas and natural gas liquids (NGLs). The Company focuses on providing midstream services in some of the prolific natural gas producing regions in the United States, including the Haynesville, Eagle Ford, Barnett, Fayetteville and Marcellus shales, as well as the Permian Delaware basin. Its operations are divided into five business segments: Gathering and Processing, Transportation, Contract Compression, Contract Treating and Corporate and Others. The Company acquired Zephyr Gas Services, LP on September 1, 2010. On May 26, 2010, the Company purchased from Energy Transfer Equity, L.P. (ETE) a 49.9% interest in Midcontinent Express Pipeline LLC (MEP) and an option to acquire an additional 0.1% interest in MEP that is exercisable on May 27, 2011.
http://www.google.com/finance?q=RGP
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