Moody's stabilizes Midwest Connector view

Moody's Investors Service said it affirmed Midwest Connector Capital Co. LLC's backed Baa2 senior unsecured ratings and changed the outlook to stable from negative.

Midwest Connector is a special-purpose entity formed solely to issue notes. The notes are jointly and severally guaranteed by Dakota Access, LLC and Energy Transfer Crude Oil Co., LLC, the respective owners of the pipeline assets which together comprise the Dakota Access crude oil pipeline system.

“The affirmation and outlook change reflect Dakota Access' sponsors stated intent and ability to repay Midwest Connector's $1 billion notes maturity coming due in April, which would leave Midwest Connector's debt leverage well below 1x.

“Although the U.S. Army Corps of Engineers' (USace) Environmental Impact Study (EIS) of Dakota Access Pipeline remains ongoing, Midwest Connector's very low leverage, the strategic value of the pipeline to its sponsors, and the sponsors' contingent equity contribution agreement provide substantial assurance that Midwest Connector will be able to comfortably service its debt under any reasonably foreseeable outcome of the EIS. The EIS is expected to be completed by year-end 2024,” Moody’s said in a press release.

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