Research Update: Energy Transfer L.P. 'BBB-' Issuer Credit Rating Affirmed On Announced Distribution Cut, Outlook Negative

U.S. diversified midstream energy partnership Energy Transfer L.P. (ET) announced that it will reduce its distribution by 50%. We are affirming our 'BBB-' issuer credit rating on ET and our issuer credit ratings on its other operating subsidiaries, including Energy Transfer Operating L.P. (ETO). The negative outlook reflects our expectation that ET's debt to EBITDA will likely be in the 5x area in 2021 despite the reduction in its distribution. We also believe there is some risk to the partnership's cash flow because of weak industry fundamentals, the ongoing litigation related to the Dakota Access Pipeline (DAPL), and potential regulatory headwinds in the energy industry, all of which may exert some pressure on its future credit measures. The negative outlook

...- U.S. diversified midstream energy partnership Energy Transfer L.P. (ET) announced that it will reduce its distribution by 50%. - We are affirming our '###-' issuer credit rating on ET and our issuer credit ratings on its other operating subsidiaries, including Energy Transfer Operating L.P. (ETO). - The negative outlook reflects our expectation that ET's debt to EBITDA will likely be in the 5x area in 2021 despite the reduction in its distribution. We also believe there is some risk to the partnership's cash flow because of weak industry fundamentals, the ongoing litigation related to the Dakota Access Pipeline (DAPL), and potential regulatory headwinds in the energy industry, all of which may exert some pressure on its future credit measures....

Research Update