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Fitch upgrades Enbridge partnerships to match parent firm after simplification

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According to Market Intelligence, December 2022

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Fitch upgrades Enbridge partnerships to match parent firm after simplification

Fitch lifted its ratings on Enbridge Energy Partners LP and Spectra Energy Partners LP and affirmed its rating on Enbridge Inc. as the Alberta-based energy transportation conglomerate completed its roll-up of both of the partnerships.

The rating agency bumped up its long-term issuer default ratings on both partnerships to BBB+ from BBB, matching Fitch's affirmed BBB+ rating on Enbridge, according to a Dec. 20 news release.

Fitch attributed its upgrade of the partnerships to Enbridge's plan to provide both with senior unsecured guarantees. The rating agency also expects roughly 90% of Enbridge's cash flows to be from regulated or take-or-pay commitment revenues, leading to its affirmation of the Canadian midstream giant's ratings.

Fitch is expecting Enbridge's adjusted debt-to-EBITDA to be just above 5.0x in the next year. "2019 is a year of capex for the Line 3 replacement project, in contrast to revenues from the project, which will commence after the in-service date, which Enbridge forecasts for the latter part of 2019," according to the agency.

Enbridge earlier on Dec. 20 completed its simplification deal with Enbridge Energy Partners and Enbridge Energy Management LLC, now both indirect subsidiaries of the company. Days earlier, the company closed its merger with Spectra Energy Partners and it closed its roll-up of Enbridge Income Fund Holdings Inc. on Nov. 8.