Fitch upgrades Locap

Fitch Ratings said it upgraded Locap LLC's long-term issuer default rating to A- from BBB+ and affirmed the company's short-term issuer default rating and commercial-paper rating at F2.

The outlook is stable.

The A- rating is supported by the company's low leverage, consistent cash flows from operations and throughput & deficiency (T&D) agreement, Fitch said.

Given Locap's operational ties with LOOP LLC, Fitch said it rates the two entities the same.

Operated by LOOP, Locap is a federally regulated crude pipeline that primarily connects LOOP's system at the Clovelly Hub to Locap's facility at St. James for oil distribution to other parts of the United States and nearby refineries, Fitch explained.

Recent growth in throughput volumes at LOOP is expected to continue to have a positive impact on Locap, the agency said.

The ratings also reflect the structural benefits provided to its debt obligations through the right to receive payments under T&D agreements with Locap's owners and parent companies, Fitch added.

Concerns include the modest increase in Locap's leverage for 2017 and 2018, driven by the construction of two new tank facilities at the St. James terminal, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.