Moody's rates Enterprise Products notes Ba1

Moody's Investors Service said it assigned a Ba1 rating to Enterprise Products Operating LP's proposed $300 million fixed/floating-rate junior subordinated notes (LoTS) issue.

Moody's also affirmed Enterprise's Baa3 senior unsecured rating with a stable outlook.

The LoTS will be rated Ba1, one notch below Enterprise's Baa3 senior unsecured rating. The one notch differential is based on the LoTS having sufficient equity-like characteristics to receive hybrid securities basket C treatment (i.e., 50% equity and 50% debt) for financial statement adjustment purposes.

This hybrid security issuance highlights the capital raising requirements associated with Enterprise's substantial multi-year growth capital spending program. While this security has equity-like characteristics, it also represents a fixed call on Enterprise's cash flow, the agency added.

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