DBRS Places Enbridge Energy Partners, L.P. Under Review with Positive Implications
EnergyDBRS Limited (DBRS) placed Enbridge Energy Partners, L.P.’s (EEP) Issuer Rating of BBB, Senior Unsecured Notes rating of BBB, Junior Subordinated Notes rating of BB (high) and Commercial Paper rating of R-2 (middle) Under Review with Positive Implications.
On December 20, 2018, Enbridge Inc. (ENB; rated BBB (high) with a Stable trend by DBRS) expects to complete the acquisition of the third-party public float of EEP (the EEP Roll-Up). ENB plans to issue common stock in exchange for the third-party units/shares of EEP to avoid incremental debt leverage at ENB following the successful vote that occurred on December 17, 2018.
The above-noted rating action follows the December 11, 2018, announcement that following completion of the EEP Roll-Up, ENB will cease external funding at EEP and expects to guarantee the senior notes of EEP and EEP would guarantee the senior notes of ENB (the Cross-Guarantees). Going forward, EEP will no longer be an active third-party debt-funding vehicle. Future funding requirements will be met from loan advances and equity injections from ENB.
Following implementation of the Cross-Guarantees in a form satisfactory to DBRS, DBRS expects to equalize the ratings of EEP with those of ENB, likely resulting in one-notch upgrades to each of EEP’s current ratings.
Notes:
The principal methodologies are Rating Companies in the Pipeline and Diversified Energy Industry, DBRS Criteria: Commercial Paper Liquidity Support for Non-Bank Issuers, DBRS Criteria: Preferred Share and Hybrid Security Criteria for Corporate Issuers and DBRS Criteria: Guarantees and Other Forms of Support, which can be found on dbrs.com under Methodologies.
The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at info@dbrs.com.
The rated entity or its related entities did participate in the rating process for this rating action. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.
For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.
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