EnLink Midstream exits 2016 with ‘solid’ leverage, ‘ample’ liquidity

By Devika Patel

Knoxville, Tenn., Feb. 15 – EnLink Midstream Partners, LP and EnLink Midstream, LLC had what it called a difficult year but still emerged from 2016 with “a very solid” leverage ratio of 3.7x.

The company intends to keep its investment-grade ratings and ended the year with $1.6 billion of liquidity.

“We ended a very tough year with debt to EBITDA of 3.7x, a very solid place to be from a balance sheet perspective,” president and chief financial officer Michael J. Garberding said on the company’s fourth quarter and full-year 2016 earnings conference call on Wednesday.

“We executed on issuing senior notes in July with an all-in interest rate of 4.85%, which was at the lowest point of the 10-year Treasury for the year.

“This helped position us with consolidated liquidity of $1.6 billion at the end of the year,” he said.

Garberding said that the company’s goals are to sustain its credit rating and solid balance sheet, retain abundant liquidity and create consistent cash flows.

“We are committed to maintaining our strong investment grade balance sheet, preserving ample liquidity and creating stable cash flows that support and grow our distribution,” Garberding said.

The company reported $195 million of adjusted EBITDA net for the fourth quarter of 2016, compared to $186 million of adjusted EBITDA net for the fourth quarter of 2015, and $775 million for full-year 2016, compared to adjusted EBITDA net of $678 million for full-year 2015.

Distributable cash flow attributable was $146 million for the fourth quarter of 2016, compared to distributable cash flow of $149 million for the fourth quarter of 2015, and $607 million for full-year 2016, compared to $529 million for full-year 2015.

Notes

On July 11, EnLink Midstream Partners priced an upsized $500 million of 4.85% senior notes due July 15, 2026 at 345 basis points over Treasuries.

The notes (Ba2/BBB-/BBB-) were sold at 99.859 to yield 4.868%.

BofA Merrill Lynch, J.P. Morgan Securities LLC and SunTrust Robinson Humphrey, Inc. were the bookrunners.

Proceeds were used to repay outstanding debt under the company’s revolving credit facility and for general partnership purposes.

EnLink is a Dallas-based midstream energy services provider.

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