S&P rates Oneok notes BB+, view to negative

Standard & Poor’s said it affirmed the BBB corporate credit rating and A-2 short-term rating on Oneok Partners LP.

The agency also said it revised the outlook to negative from stable.

S&P also said it also affirmed the BB+ corporate credit rating on Oneok Inc. and revised the outlook to negative.

The agency also said it assigned a BB+ rating and 3 recovery rating to the company’s proposed senior unsecured notes. The 3 recovery rating indicates 50% to 70% expected default recovery.

Oneok Inc. recently announced a $500 million debt offering to purchase common units from Oneok Partners LP, S&P said.

As a result, the agency said it expects system-wide leverage at Oneok to be elevated in the near term.

Industry fundamentals continue to pressure the midstream energy sector, which has made it more challenging to issue public equity and increased the cost of capital for many entities, S&P said.

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