S&P lifts DCP Midstream view to stable

S&P said it affirmed the BB corporate credit and senior unsecured debt ratings on DCP Midstream LLC and revised the outlook to stable from negative.

The agency also said it revised the recovery rating on the company's senior unsecured debt to 3 from 4, indicating 50% to 70% expected default recovery.

The BB rating on the debt is unchanged.

S&P also said it affirmed the BB corporate credit and senior unsecured debt ratings on DCP Midstream Partners LP and revised the outlook to stable from negative.

While natural gas liquids (NGLs) pricing continues to remain volatile in the 40-cent range, the agency said it expects DCP Midstream’s and DCP Midstream Partners's consolidated financial metrics to improve given their lower break-even cost in the low 30-cent range.

The stable outlook reflects the group’s adequate liquidity and an expectation that NGL prices will remain higher than 40 cents per gallon, which resulting in a consolidated adjusted debt-to-EBITDA ratio for the company of less than 5.5x in the long term, the agency said.

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