Fitch to rate Enterprise Products hybrids BB+

Fitch Ratings said it expects to assign a BB+ rating to $300 million of fixed/floating-rate junior subordinated notes due 2066 (LoTS) to be issued by Enterprise Products Operating LP (unsecured debt and issuer default rating BBB-, outlook for debt securities stable).

The LoTS are believed to be the first hybrid securities to be offered publicly by an master limited partnership. Based upon Fitch's rating criteria, these securities have a high equity component; Fitch will allocate the principal 75% to adjusted equity and 25% to adjusted debt in evaluating the financial leverage of Enterprise Products Partners LP.

In assigning its rating, Fitch said it will consider the structure and terms of the securities, the amount of the offering, their ranking in Enterprise's capital structure and the overall effect of the offering on the company's financial profile.

For Enterprise, the LoTS provide funding diversification, a favorable consideration given the scale of its growth capital expenditure budget, which could approach $2 billion in 2006.

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