S&P assigns BBB to Spectra Energy notes

Standard & Poor’s said it assigned its BBB issue-level rating to Spectra Energy Partners LP’s proposed senior unsecured notes.

The company’s corporate credit rating is BBB, and the outlook is stable.

S&P said Spectra’s “strong” business risk profile reflects its geographically diverse mix of natural gas transmission and crude oil and natural gas liquids pipeline assets, which have solid credit characteristics and generate stable, fee-based cash flows. The “significant” financial risk profile reflects the agency’s expectation for total debt to EBITDA of about 4x, an aggressive growth strategy that will generate discretionary cash flow deficits, and the master limited partnership structure that provides an incentive for Spectra to pay out most of its cash flow after maintenance capital spending to unitholders each quarter.

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