Fitch rates Buckeye loans BB+, cuts rating, view to stable

Fitch Ratings said it assigned a BB+/RR1 rating to Buckeye Partners LP’s proposed secured term loan and secured revolver.

The agency downgraded Buckeye’s long-term issuer default rating to BB from BBB- and the senior unsecured notes to BB/RR4 from BBB-. The junior subordinated notes’ rating was cut to B+/RR6 from BB.

The downgrades end Fitch’s review of Buckeye that started in May with the announcement it was going private.

“Fitch has downgraded Buckeye’s IDR by two notches based on expectations for a significant increase in leverage. Before Buckeye agreed to be taken private in May 2019, Fitch forecasted that its leverage (defined as total debt to adjusted EBITDA with debt adjusted for equity credit) would be approximately 4.5x as of yearend 2019. With the additional debt at Buckeye to finance going private, Fitch now expects 2019 yearend leverage to be in the range of 6.2x to 6.8x,” the agency said in a press release.

Fitch removed the ratings from ratings watch negative and changed the outlook to stable.

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