S&P rates Magellan Midstream notes BBB

Standard & Poor's said it assigned a BBB rating to Magellan Midstream Partners LP's $250 million senior unsecured notes due 2018 and affirmed the BBB corporate credit rating.

The outlook remains stable.

Proceeds will be used to refinance outstanding debt under the company's revolving credit facility.

The rating reflects the company's satisfactory business profile and intermediate financial profile, the agency said.

Strengths include the relatively stable cash flow generated by the entity's pipeline and terminal assets, a solid pipeline of organic growth projects, moderate debt leverage and adequate liquidity, S&P added.

These strengths are partially offset by some commodity price exposure and the master limited partnership structure that requires virtually all free cash flow be distributed to unitholders, the agency noted.

For the 12 months ended March 31, Magellan had a debt-to-EBITDA ratio of about 2.6 times.

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