S&P lowers Crestwood Holdings

S&P said it assigned a BB- corporate credit rating to Crestwood Equity Partners LP.

The outlook is negative.

The agency also said it affirmed the BB- corporate credit rating on operating subsidiary Crestwood Midstream Partners LP and the BB- issue-level rating on the company's unsecured debt. The 4 recovery rating on the unsecured debt is unchanged, indicating 30% to 50% expected default recovery.

S&P also said it lowered the corporate credit rating on Crestwood Holdings LLC to CCC+ from B-.

The agency also said it downgraded the company's secured debt to CCC+ from B- and left the 4 recovery rating unchanged, indicating 30% to 50% expected default recovery.

The agency said it views Crestwood's recent 56% quarterly cash-distribution cut, strategic joint venture with Consolidated Edison Inc. and expected pay-down of debt as positive factors for the ratings.

However, Crestwood will now be more reliant on riskier cash flows exposed to volumetric risk, S&P added.

The partnership has sold its stable cash flow producing northeast natural gas storage and pipeline assets into the joint venture with Con Ed for $975 million and will use the proceeds to improve its liquidity position and balance sheet, the agency said.

The downgrade of the holdings company reflects a view that the distribution cut will result in a capital structure that is unsustainable in the long term, S&P said.

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