S&P lifts Tallgrass Energy to positive

S&P said it affirmed the BB+ corporate credit and issue-level ratings on Tallgrass Energy Partners LP and revised the outlook to positive from stable.

The 3 recovery rating is unchanged, indicating 50% to 70% expected default recovery.

The action reflects the change in the approach in assessing the credit quality of Tallgrass following news that plans to simplify the structure, the agency said.

When the transaction closes, Tallgrass will own 75% of Rockies Express Pipeline LLC, which is the reason the agency decided to consolidate its cash flows and debt proportionately.

As a result, the partnership's scale notably increases, resulting in total adjusted EBITDA of about $1 billion, S&P explained.

The outlook on Tallgrass is positive, reflecting an expectation of increasing EBITDA and adjusted debt leverage improving to the 4x to 4.5x range by 2019, the agency said.

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