S&P gives Enterprise Products notes B+

Standard & Poor's said it assigned its B+ rating to Enterprise Products Operating LP's proposed $300 million junior subordinated notes.

S&P said it also affirmed its BB+ corporate credit rating on the company and its parent Enterprise Products Partners LP, adding that the proceeds from the notes will be used to reduce debt and for general corporate purposes.

The outlook for both entities is positive.

S&P noted that the ratings on the Enterprise companies reflect the partnership's integrated energy midstream operations, favorable asset positioning, large proportion of stable fixed-fee revenues, a shift to onshore growth from the riskier offshore and an appropriate mix of equity funding for new growth projects.

Offsetting these strengths are the partnership's aggressive growth, highlighted in Enterprise's continuing large capital spending, a likely decline in distribution coverage because much of this recent capital spending will not generate immediate returns and cash flow volatility stemming from volume risks associated with its natural gas gathering and processing businesses, the agency said.

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