Research Update: Energy Transfer L.P. Upgraded To 'BBB' On Improved Ratios And Financial Policy, Outlook Stable; Debt Ratings Raised

Dallas-based diversified midstream energy master limited partnership Energy Transfer L.P. (ET) has executed a definitive agreement to acquire Crestwood Equity Partners L.P. (CEQP) in an all-equity transaction. The transaction has a marginal impact on leverage, reflecting ET's focus on maintaining a robust balance sheet while maintaining adjusted financial leverage in the low-4x area. We view the transaction structure as supportive of its publicly stated financial policy and expect the transaction to close in the fourth quarter. Year-to-date performance continues to reflect measured financial prudence. As a result, we raised our issuer credit rating on the partnership to 'BBB' from 'BBB-'. We also raised our issue-level rating on its senior unsecured debt to 'BBB' from 'BBB-'. At the same time, we

...- Dallas-based diversified midstream energy master limited partnership Energy Transfer L.P. (ET) has executed a definitive agreement to acquire Crestwood Equity Partners L.P. (CEQP) in an all-equity transaction. The transaction has a marginal impact on leverage, reflecting ET's focus on maintaining a robust balance sheet while maintaining adjusted financial leverage in the low-4x area. We view the transaction structure as supportive of its publicly stated financial policy and expect the transaction to close in the fourth quarter. Year-to-date performance continues to reflect measured financial prudence. - As a result, we raised our issuer credit rating on the partnership to '###' from '###-'. We also raised our issue-level rating on its senior unsecured debt to '###' from '###-'. At the same time, we raised the short-term rating to 'A-2' from 'A-3' and raised the rating on the preferred stock and junior subordinated debt to '##+' from '##'. - The stable outlook reflects our expectation...

Research Update