Fitch turns DCP views to positive

Fitch Ratings said it changed the outlooks for DCP Midstream, LP's and DCP Midstream Operating, LP to positive from stable.

The agency also affirmed their long-term issuer default ratings at BB+. Fitch affirmed the senior unsecured ratings and junior subordinated notes for DCP Operating at BB+/RR4 and BB-/RR6, respectively. Additionally, Fitch affirmed DCP's preferred equity ratings at BB-/RR6.

“The positive outlook revision reflects DCP's leverage (measured as total debt with equity credit to operating EBITDA) has improved faster than previously forecast, and is expected to decline below Fitch's positive 4.5x leverage sensitivity by YE 2021. Fitch anticipates FCF will be used for debt reduction over the forecast period. While leverage sustained below 4.5x is a key trigger for an upgrade, given DCP's exposure to NGL price movements, the use of hedging to reduce DCP's commodity price exposure and management's capital allocation plans are important triggers,” Fitch said in a press release.

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