Fitch rates Energy Transfer Equity notes BB+

Fitch Ratings said it assigned a BB+ rating to Energy Transfer Equity, LP's senior secured notes offering due 2027.

The issuer default rating is BB and the outlook is stable.

Energy Transfer Equity will use the proceeds to repay borrowings under its term loan and revolving credit facilities and for general partnership purposes.

Fitch said that recent mergers and growth projects at and among Energy Transfer Equity’s subsidiaries have resulted in a larger, more diversified and generally stronger family of Energy Transfer companies. On a consolidated basis, the percentage of contractually supported fee-based margins has gradually increased.

The recently completed merger between subsidiaries Energy Transfer Partners, LP (BBB-, stable) and Regency Energy Partners, LP (BBB-, stable) should provide Energy Transfer Equity with increased cash flows driven by expected synergies and improved returns on growth projects previously planned at Regency Energy, the agency said.

Additionally, Energy Transfer Equity should benefit somewhat from a simplification of its organizational structure and slightly improved credit profile of its subsidiaries though it remains structurally subordinate to a significant amount of subsidiary debt. Energy Transfer Partners remains Energy Transfer Equity’s largest source of cash flow and earnings.

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