Research Update: EQM Midstream Partners L.P. Ratings Affirmed Despite Announced Delay to The MVP Project, Outlook Stable

EQM Midstream Partners L.P. recently delayed the expected in-service date for the Mountain Valley Pipeline (MVP) project and reported a higher total project cost estimate, which we believe will stress its credit metrics in 2021 given the project's importance to its deleveraging plan. We also recently upgraded its main counterparty EQT Corp. to 'BB', which supports our view of the company's counterparty risk exposure. We are affirming our 'BB-' issuer credit rating on EQM and our 'BB-' issue-level rating on its senior unsecured debt. Our '3' recovery rating (rounded estimate: 50%) on this debt remains unchanged. The stable outlook incorporates our view that the MVP project will remain under construction through 2021, leading EQM's leverage to remain above 5.5x for

...- EQM Midstream Partners L.P. recently delayed the expected in-service date for the Mountain Valley Pipeline (MVP) project and reported a higher total project cost estimate, which we believe will stress its credit metrics in 2021 given the project's importance to its deleveraging plan. - We also recently upgraded its main counterparty EQT Corp. to '##', which supports our view of the company's counterparty risk exposure. - We are affirming our '##-' issuer credit rating on EQM and our '##-' issue-level rating on its senior unsecured debt. Our '3' recovery rating (rounded estimate: 50%) on this debt remains unchanged. - The stable outlook incorporates our view that the MVP project will remain under construction through 2021, leading EQM's leverage to remain above 5.5x for the next 12 months. Our base-case assumptions include relatively stable volumes and EBITDA and deleveraging related to the MVP project, which we assume will enter service around year end 2021....

Research Update