S&P raises Western Midstream

S&P said it raised its ratings for Western Midstream Operating LP and its senior unsecured debt to BBB- from BB+.

Western Midstream’s main customer is Occidental Petroleum Corp., which S&P upgraded to BB+ from BB on Tuesday.

“We think Western's conservative financial policy will lead to leverage of 3.5x or below in 2022. It has improved over the past few years, and we expect more improvement in 2022. Furthermore, we expect the partnership to generate material free cash flow over the next two years even if Western uses some of this cash to enhance shareholder returns,” S&P said in a press release.

The outlook is stable.

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