DBRS views Inter Pipeline negatively

DBRS said it changed the trend on Inter Pipeline Ltd. to negative from stable and confirmed the issuer rating and senior unsecured notes rating at BBB (low) and its fixed-to-floating rate subordinated notes at BB.

“The change in trend to negative from stable follows the company’s announcement that because of operational constraints, production at the propane dehydrogenation (PDH) facility will likely remain below design capacity in H1 2024 before ramping up to planned run rate production in H2 2024,” the agency said in a press release.

Consequently, DBRS said it forecasts the improvement in Inter Pipeline’s modified consolidated cash flow-to-debt ratio to be around 15%, which is currently weak, to be delayed at least into 2025 and is subject to resolution to the operating constraints at HPC.

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