DCP Midstream (DPM) Ratings Affirmed by S&P Following Philips 66 (PSX), Spectra (SE) Investment Announcement

Standard & Poor's Ratings Services said affirmed its 'BB' corporate credit ratings on Denver-based midstream energy company DCP Midstream LLC (Midstream) and its master limited partnership DCP Midstream Partners L.P. (Partners)(NYSE: DPM). The outlook remains negative.

At the same time, we affirmed all of our issue-level ratings on Midstream and Partners. Our recovery ratings on the debt remain unchanged.

"The negative outlook reflects our view that DCP's consolidated cash flows continue to remain exposed to weak NGL prices, which could pressure throughput volumes and result in consolidated debt to EBITDA that could remain above 5x through 2017," said Standard & Poor's credit analyst Mike Llanos.

We could lower the rating if we expect consolidated leverage to be above 5x in the long term and if there were no offsetting actions taken by management or additional support from the sponsors. This could result from a further downward revision of our commodity price forecast or weaker-than-expected throughput volumes.

We could revise the outlook to stable if we expect financial leverage to remain below 5x for a sustained period of time. This could occur from a confluence of factors, including reduced operating costs, improved commodity prices, and higher throughput volumes.

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