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S&P upgrades ratings on Enbridge Energy Partners on simplification benefits

S&P Global Ratings raised its ratings on Enbridge Energy Partners LP on expectations that the partnership will be at the core of Enbridge Inc. operations after the closing of the simplification merger between the two entities.

The rating agency upgraded Enbridge Energy Partners' long-term issuer credit rating to BBB+ from BBB; its issue-level rating on senior unsecured notes to BBB+ from BBB; and its issue-level rating on junior subordinate notes to BBB- from BB+, according to a Nov. 8 news release. S&P also affirmed its short-term rating on the partnership's commercial paper program at A-2. S&P also removed the ratings from CreditWatch, where they were placed with positive implications. The outlook remains stable.

S&P expects that support from Enbridge Inc. for the partnership would increase after deal closing, as Enbridge Energy Partners owns the U.S. portion of Enbridge's integrated pipeline system, making the partnership crucial to Enbridge's business strategy. "[Enbridge Energy Partners] has a strong, long-term commitment from senior management, in good times and under stress," S&P said.

The stable outlook reflects S&P's view that the roll-up will close as anticipated by the end of the year. Under the deal, Enbridge would exchange one Enbridge Energy Partners common unit with 0.3350 Enbridge common share, representing an increase of 8.7% to the exchange ratio Enbridge proposed in May.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.