Fitch to rate Enterprise 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) of Enterprise Products Operating LP.

Interest on the LoTS will be fixed through July 2016 and thereafter adjusted quarterly.

The company's senior unsecured debt and issuer default rating is BBB- and the outlook for Enterprise's debt securities is stable.

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.

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

Given their initial fixed coupon rate and equity content the cost of capital for the LoTS should over time be lower than the traditional mix of Enterprise's debt and equity securities.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.