Fitch affirms Express Pipeline debt

Fitch Ratings said it affirmed Express Pipeline, LLC/Express Pipeline LP's $110 million outstanding senior secured debt due 2020 at A-.

The outlook is stable.

“The U.S. and Canadian oil pipeline project benefits from ship-or-pay revenue contracts for a substantial portion of the pipeline capacity that provide about 75% of revenues, a very competitive position as the sole pipeline delivering Canadian heavy crude to Rocky Mountain refineries, low leverage of 0.52x net debt/cash flow available for debt service (CFADS), and cash flow that is resilient to merchant market exposure,” the agency said in a news release.

Fitch said its rating case, which assumes the senior debt is refinanced in early 2020 at maturity over a reasonable useful life through 2030 under a fully amortizing mortgage-style repayment profile priced at 8%, projects debt service coverage ratios exceeding 9x after refinancing.

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