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Spectra Energy Partners (SEP) Proposed Unsecured Notes Offering Rated 'BBB' by S&P

March 9, 2015 11:13 AM EDT

Standard & Poor's Ratings Services said today it assigned its 'BBB' issue-level rating to Houston-based Spectra Energy Partners L.P.'s (SEP) (NYSE: SEP) proposed senior unsecured notes. SEP's corporate credit rating is 'BBB' and the outlook is stable.

SEP's "strong" business risk profile reflects its geographically diverse mix of natural gas transmission and crude oil and natural gas liquids (NGL) pipeline assets, which have solid credit characteristics and generate stable, fee-based cash flows. The "significant" financial risk profile reflects our expectation for total debt to EBITDA of about 4x, an aggressive growth strategy that will generate discretionary cash flow deficits, and the master limited partnership structure that provides an incentive for SEP to pay out most of its cash flow after maintenance capital spending to unitholders each quarter.

"The stable rating outlook reflects our belief that SEP will maintain debt to EBITDA between 3.75x and 4x and adequate liquidity as the partnership funds its large organic growth projects during the next few years," said Standard & Poor's credit analyst Michael Grande.



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