Enterprise Products Partners L.P.

The stable outlook reflects our expectation that EPD will maintain a strong competitive position and solid credit measures. We expect the partnership to maintain adjusted debt to EBITDA of about 3.5x and distribution coverage of close to 1.5x in 2021. We expect the partnership will continue to self-fund its growth capital spending. We also expect the partnership to opportunistically use its multiyear $2 billion common unit buyback program. We could consider a negative rating action if debt to EBITDA rose above 4.25x on a sustained basis, which could occur if the partnership were more aggressive than we expected in funding growth projects and acquisitions. We could consider a positive rating action on EPD if the partnership maintained leverage closer to

...Enterprise Product Partners L.P. (EPD) performed well in 2020 amid the volatility in commodity prices, and we expect it to continue to perform well in 2021. EPD's operating performance was better than expected in 2020 mainly due to its strong contractual profile with fee-based revenue but also due to contango market conditions and the large number of projects it placed into service in 2020. Actual adjusted EBITDA for 2020 was better than our initial forecast. We believe operating performance will remain stable in 2021. Changing market conditions and significantly lower capital spending have lowered our growth expectations in EBITDA over the medium term. EPD will have significantly lower capital spending in 2021 than in both 2019 and 2020. Major capital spending projects in 2021 include PDH II plant, Gillis Pipeline, Valero Corpus Christi RGP to MBTV, and C5 hydro-treater. Over time, lower capital spending will limit growth in cash flows. We expect EPD to strategically continue executing...

Full Report