Fitch rates EQT Midstream notes BBB-

Fitch Ratings said it assigned a BBB- rating to EQT Midstream Partners, LP's issuance of senior unsecured notes.

Proceeds are to be used to reduce revolver borrowings and for general partnership purposes.

Fitch said the BBB- rating is supported by EQT Midstream’s low leverage of 1.3 times for the 12 months ending Sept. 30, and management's strategy to maintain its long-term leverage ratio of 3.5 times or lower.

The company also operates with a strong distribution coverage ratio. As of Sept. 30, it was 1.7 times for the trailing 12 months.

The BBB- rating also acknowledges EQT Midstream’s significant customer concentration from EQT Corp. (EQT; BBB-/stable). In 2015, EQT accounted for 73% of EQT Midstream’s total revenues. EQT currently owns 90.1% of EQT GP Holdings, LP (NYSE: EQGP) which owns a 1.8% general partner interest, and a 26.6% limited partnership interest in EQT Midstream.

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