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Fitch: MarkWest notes BB
Fitch Ratings said it expects to assign a BB rating to MarkWest Energy Partners, LP's new senior notes due 2022.
The proceeds will be used to tender for the company's $334 million 8¾% notes due 2018, reduce revolver borrowings and for general partnership purposes.
MarkWest currently has a long-term issuer default rating of BB, senior secured revolving credit facility of BB+ and senior debt rating of BB.
The ratings reflect the significant percentage of non-fee-based cash flows from keep-whole and percent-of-proceeds arrangements in the company's gas-processing segment and also the linkage between MarkWest's gathering and processing volumes and the drilling/production activities of its exploration and production customers and, ultimately, volatile hydrocarbon prices, the agency said.
These concerns are mitigated by its geographically diverse footprint with leading positions in the liquids-rich areas in the mid-continent and Appalachia, an increasing amount of fee-based revenue sources and a layered hedging strategy, Fitch said.
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