In the case of financial duress at EPE or EPCO, EPOLP may be called upon (at least indirectly) in the future to meet the financial obligations of these affiliates or be encouraged to adopt operating practices that are inconsistent with the interests of its creditors.
In addition, EPE's debt is expected to be non-recourse to EPD and EPOLP.
Fitch has affirmed the following ratings of EPOLP with a Stable Outlook:
EPOLP will retain the remaining direct 34% ownership interest in the assets and will continue operating the assets.
Any significant change in the asset characteristics or planned credit profile of DEP, however, could pose a risk to EPOLP, possibly resulting in a change in EPOLP's rating and/or Rating Outlook.
In evaluating the DEP transaction, Fitch's view is that DEP's credit profile will remain largely dependent on EPOLP due to the proposed corporate structure and the joint ownership of the assets at DEP.
In reviewing the overall credit quality of EPOLP, the ratings continue to be supported by the:
The affirmation also recognizes the favorable North American supply/demand fundamentals and robust commodity prices that have encouraged oil and natural gas infrastructure development at EPOLP and its affiliates.
In general, rating concerns for EPOLP include the structural and functional ties with EPE and EPCO and, as noted, with DEP following the proposed transactions.
Regarding EPE, Fitch believes that the pending $525 million debt migration from EPCO has moderate credit implications for EPOLP in the near-term.
On a standalone basis, EPOLP continues to exhibit operating and financial characteristics consistent with its current 'BBB-' rating.