Fitch Withdraws EnLink Midstream, LLC Ratings Following Transaction Close

Published: 2025-02-27 04:14:10 ET OKE

Fitch Ratings has affirmed and withdrawn EnLink Midstream, LLC's and EnLink Midstream Partners, LP's (collectively, EnLink) 'BBB-' Long-Term Issuer Default Rating (IDR) with a Stable Rating Outlook.

This resolves Fitch's Rating Watch Positive. The ratings are being withdrawn because EnLink has reorganized pursuant to it being acquired by ONEOK, Inc. (OKE; BBB/Stable). Accordingly, Fitch will no longer provide ratings or analytical coverage for EnLink.

Fitch has upgraded the senior unsecured notes originally issued by EnLink Midstream, LLC and EnLink Midstream Partners, LP to 'BBB' from 'BBB-' as OKE has become the legal obligor on those debt instruments.

OKE's ratings reflect its integrated midstream platform, significant size and scale, and diversity across several basins and hydrocarbons.

Fitch Ratings is withdrawing the IDRs of EnLink Midstream, LLC and EnLink Midstream Partners, LP as these two companies were subject to reorganization as a result of an acquisition. Accordingly, Fitch Ratings will no longer provide ratings or analytical coverage for EnLink Midstream, LLC and EnLink Midstream Partners, LP.

Key Rating Drivers

Obligor Swap: OKE has become the legal obligor on previously issued EnLink debt via documentation of supplemental of indentures. As such, previously issued EnLink debt ranks pari passu with existing OKE unsecured debt and is rated 'BBB'. Future rating actions on previously issued EnLink unsecured notes will be subject to the same factors affecting the ratings of OKE's unsecured notes.

RATING SENSITIVITIES

For OKE:

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

EBITDA leverage forecast at or above 4.7x on a sustained basis;

Unfavorable changes in the business mix or financial policies that result in a weaker credit profile.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

An increase in the portion of EBITDA coming from revenue assurance-type contracts sustained over the forecast;

EBITDA leverage forecast at or below 3.7x on a sustained basis.

Issuer Profile

ONEOK, Inc. is a large, integrated midstream company. The company's more than 60,000-mile pipeline network transports natural gas, natural gas liquids, refined products and crude oil through different regions of the central U.S.

Summary of Financial Adjustments

Fitch calculates midstream energy companies' EBITDA by use of cash distributions from unconsolidated affiliates rather than by use of equity in earnings. Non-cash mark-to-market expenses of various types are added back to the base profit figure to arrive at EBITDA.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS

Click here to access Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in our credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included.

ESG Considerations

The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit https://www.fitchratings.com/topics/esg/products#esg-relevance-scores.