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Fitch gives Enbridge, MLP investment grade first-time ratings

Fitch Ratings assigned investment grade first-time ratings to Enbridge Inc. and Enbridge Energy Partners LP, reflecting the entities' "beneficial" size and scale and stable cash flows.

The rating agency gave Enbridge a long-term issuer default rating and senior unsecured rating of BBB+, while Enbridge Energy Partners received a long-term issuer default rating and senior unsecured rating of BBB, according to a June 2 news release.

Fitch cited Enbridge's status as one of the largest midstream companies in North America, with a large crude oil and liquids pipeline system and industry-leading natural gas services. Enbridge is also Canada's largest natural gas distribution provider through its subsidiaries.

"ENB's 'BBB+' rating also reflects the diversity of cash flows, low customer credit risk, an array of credit-supportive financial policies concerning both liquidity and hedging, the company's proven ability to tap multiple deep pools of debt and equity capital, and its decade-plus demonstrated competence in the construction phase of its development undertakings," Fitch said.

Enbridge also benefits from supportive regulation by the Federal Energy Regulatory Commission and Canada's National Energy Board, as about 95% of expected cash flows come from regulated or take-or-pay cash flows. The entities also have a reliable track record with on-budget construction, the release said.

Fitch described Enbridge's merger with Spectra Energy Corp, which closed in February, as a "transformative strategic transaction" that boosts Enbridge's scale and segment diversity through both companies' contribution of low-risk business divisions, which include liquids pipelines, gas distribution utilities and long-distance natural gas pipelines.