trending Market Intelligence /marketintelligence/en/news-insights/trending/vpklblumdptfoe7izu6zmq2 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *

* Required

In this list

In anticipation of increased leverage, Moody's changes Phillips 66's outlook

Street Talk Episode 51 - Goldman Talks Libor Transition, Recent SOFR Volatility

#ChangePays: Although Still Underrepresented, Women in the C-Suite are Driving Profitability

Cable Nets For Kids Enjoy Wide Carriage On Skinny Bundles

Energy

Power Forecast Briefing: Fleet Transformation, Under-Powered Markets, and Green Energy in 2018


In anticipation of increased leverage, Moody's changes Phillips 66's outlook

Moody'schanged Phillips 66 Co.'soutlook to negative from stable due to an anticipated consolidated leverageelevation from shareholder dividends and share buybacks.

Therating agency has also affirmed its A3 senior unsecured rating and the company'scommercial paper program's Prime-2 rating, according to an Oct. 11 note.

"Theannounced $1.1 billion debt issuance at Phillips 66 Partners LP to fund a from Phillips 66 coupled withreduced cash flow in the currently weak refining environment will result inhigher consolidated leverage than we associate with the Phillips 66's A3 ratingthrough 2017," Moody's Senior Vice President Terry Marshall said.

Thescope and diversity of the company's refining business will somewhat mitigatethe expected increase in leverage, Moody's said.

Inaddition, Jefferies Group LLC is maintaining a hold rating on Phillips 66 andPhillips 66 Partners, with a price target of $72 and $54, respectively.

Asof 1:51 p.m., Phillips 66's stock price was down 1.05% to $80.45 after reachingan intraday peak of $81.34, while Phillips 66 Partners' stock price fell 0.76%to $47.08 after climbing to $47.63.

Followingits fourth drop-down in 2016, Jefferies expect Phillips 66 to further drop downits Freeport LPG export terminal shortly after its in-service, and haveformally modeled a sale in early 2017.

"[W]eassume [Phillips 66 Partners] will acquire the Freeport LPG export assets for~$2.7B, implying a ~9.0x transaction multiple on $300mm of projected FY EBITDA,leaving upside to [Phillips 66 Partners] if/when LPG differentials return and/ornew LT contracts are secured," Jefferies said.