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S&P gives Tallgrass Energy CCR, notes BB+
S&P said it assigned its BB+ corporate credit rating to Tallgrass Energy Partners LP.
The outlook is stable.
The agency also assigned its BB+ issue-level rating and 3 recovery rating to Tallgrass Energy Partners’ and Tallgrass Energy Finance Corp.'s $400 million senior unsecured notes due 2024. The 3 recovery rating indicates that lenders can expect meaningful (50% to 70%; lower half of the range) recovery in the event of a payment default.
S&P said the BB+ corporate credit rating reflects its assessment of a fair business risk profile and significant financial risk profile.
The partnership recently acquired a 25% interest in Rockies Express Pipeline (REX) for $440 million. The agency said its ratings reflect the expectation that the partnership will be able to successfully execute on further dropdowns over the next few years of the remaining 50% interest in Rockies Express from private company, Tallgrass Development, LP while maintaining leverage at current levels.
S&P expects REX’s cash flows and the weighted average length of its contracts to increase in 2017 when the capacity enhancement across zone 3 of the pipeline project becomes operational.
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