Fitch gives Plains All American notes BBB

Fitch Ratings said it assigned a BBB rating to Plains All American Pipeline, LP's senior unsecured note offering.

Proceeds are expected to be used for general partnership purposes.

Fitch said the company’s leverage remains high relative to similarly rated midstream MLP issuers.

For a BBB midstream energy rating, the agency typically expects mid-cycle leverage in a 4 times to 4.5 times range. It expects Plains All American’s leverage as defined as debt/adjusted EBITDA to be in the range of 5.3 times to 5.6 times for 2016, improving to roughly 4.5 times to 4.75 times by 2018.

With leverage expected to be over 5 times in the near-term, Fitch said it is concerned that lower or range bound commodity prices and differentials at or near current levels could continue to weigh on operating results and lead to high sustained leverage.

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