Research Update: Energy Transfer Equity Ratings Placed On Watch Positive, Energy Transfer Partners Ratings Affirmed, On Merger News

U.S. midstream energy master limited partnerships Energy Transfer Equity L.P. (ETE) and Energy Transfer Partners L.P. (ETP) have entered into a definitive agreement providing for the merger of ETP with a wholly owned subsidiary of ETE in a unit-for-unit exchange. We are placing our 'BB-' issuer credit and senior secured debt ratings for ETE on CreditWatch with positive implications. We are affirming our ratings on ETP and wholly owned operating subsidiaries Energy Transfer L.P., Sunoco Logistics Partners Operations L.P., Panhandle Eastern Pipe Line Co. L.P., and Regency Energy Partners L.P. The stable outlook on ETP reflects our belief that the combined company's credit measures will be acceptable for the rating, and that the robust coverage ratios of 1.6x-1.8x will provide

...+ U.S. midstream energy master limited partnerships Energy Transfer Equity L.P. (ETE) and Energy Transfer Partners L.P. (ETP) have entered into a definitive agreement providing for the merger of ETP with a wholly owned subsidiary of ETE in a unit-for-unit exchange. + We are placing our '##-' issuer credit and senior secured debt ratings for ETE on CreditWatch with positive implications. + We are affirming our ratings on ETP and wholly owned operating subsidiaries Energy Transfer L.P., Sunoco Logistics Partners Operations L.P., Panhandle Eastern Pipe Line Co. L.P., and Regency Energy Partners L.P. + The stable outlook on ETP reflects our belief that the combined company's credit measures will be acceptable for the rating, and that the robust coverage ratios of 1.6x-1.8x will provide more funding certainty and help strengthen the balance sheet over time. + We expect to resolve the CreditWatch listing on ETE when the transaction closes in the fourth quarter 2018, at which time we are likely...

Research Update