S&P revises DCP Midstream view to stable

S&P said it revised the outlook for DCP Midstream LP to stable from negative.

DCP outperformed S&P’s EBITDA expectations over the last several quarters. “Following the market turmoil in the first half of 2020, we had expected DCP’s EBITDA to fall significantly given its direct commodity risk and exposure to gathering and processing volumes. However, the company’s EBITDA has remained more stable than we expected given the somewhat resilient volumes across its footprint in the DJ and Permian basins, increased exposure to long-haul pipeline fixed-fee contracts and its success in lowering its operating cost structure,” the agency said in a press release.

The outlook reflects the view DCP’s leverage will stay below 5x and approach 4x over the next few years while maintaining a conservative financial policy and EBITDA remains somewhat stable, S&P said.

The agency also affirmed the BB+ ratings on DCP and its unsecured debt (recovery rating :3), the BB- junior subordinated rating (recovery rating: 6), and the B+ preferred stock rating.

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