S&P views Equitrans Midstream negatively

S&P said it revised its outlook for Equitrans Midstream (ETRN) to negative from stable but affirmed all its ratings, including the BB- issuer rating.

The in-service date for Mountain Valley Pipeline has been delayed until 2023, keeping Equitrans Midstream's S&P Global Ratings' adjusted leverage above 5.5x for an extra 18 months.

“The company's exposure to MVP is the main credit driver over the next 12 to 24 months. ETRN's operating subsidiary EQM Midstream Partners, LP (EQM), will own about 48% of the equity in MVP and we consider it a material project. Our expectation for MVP to initiate operations and, in turn, issue project-level nonrecourse debt are important inflection points for the credit rating, because they will lead to lower leverage at the company,” the agency said in a press release.

The outlook reflects the possibility for a downgrade if ETRN's S&P Global Ratings' adjusted leverage remains above 5.5x in 2024, which could occur if MVP is further delayed and mitigating actions are not taken, the agency said in a press release.

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