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Plains All American Pipeline receives Fitch rating

Published by
World Pipelines,

Fitch Ratings has assigned Plains All American Pipeline, LP (PAA) a long-term issuer default rating (IDR) and senior unsecured rating of 'BBB.' Fitch has also assigned PAA a short term IDR and commercial paper rating of 'F2'. The rating outlook is negative.

PAA's ratings reflect its beneficial size and scale, as well as, the cash flow and earnings stability provided by PAA's strong portfolio of assets, which generate roughly 80% of EBITDA from fee based transportation and facilities businesses.

These fee based businesses are expected to grow moderately in the near term even as commodity price weakness continues and oil and gas production in the US and Canada declines near term. PAA has a strategically located asset base, which spans all of the major oil production basins and most of the critical crude demand centres in the US and Canada. PAA's fee-based EBITDA growth is supported by new projects and a robust near term growth capital programme with substantial minimum volume commitments from primarily investment grade counterparties. These projects are expected to provide revenue growth even with near term commodity price volatility.

The negative outlook is reflective of Fitch's concerns around near-term high leverage, the impact of overcapacity and volume risk on profitability, and general uncertainty around capital market access for the MLP space.

The full report can be found here.

Edited from source by Stephanie Roker

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