Fitch rates Energy Transfer preferreds BB

Fitch Ratings said it assigned a BB preferred equity rating to Energy Transfer Operating, LP's proposed offering of series E fixed- to floating-rate cumulative perpetual preferred units.

The proceeds will be used to repay revolving credit facility borrowings and for general partnership purposes, Fitch said.

The series E units rank junior to all Energy Transfer's existing and future indebtedness and senior to common equity, the agency said.

The ratings are reflective of the significant size, scale, operating and geographic diversity that it currently possesses, Fitch said.

Energy Transfer's geographic and business line diversity provides a solid operating asset base and a decent platform for growth within most of the major U.S. production regions, the agency said.

Fitch said it remains concerned by the fair amount of execution, regulatory and legal risks associated with Energy Transfer's ongoing project backlog and recently completed projects currently facing increased scrutiny or ongoing construction delays.

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