S&P shifts Zenith Energy view to stable

S&P said it changed the outlook for Zenith Energy U.S. Logistics Holdings LLC to stable from negative after it acquired Plains All American Pipeline LP’s Los Angeles based storage terminals.

“With the transaction almost doubling Zenith’s storage capacity, we now expect adjusted debt-to-EBITDA to average approximately 5.9x over 2021-2022,” S&P said in a press release.

The agency said it forecasts the terminals will add about $20 million to Zenith’s adjusted EBITDA annually on a run-rate basis. This represents about a 67% increase from 2019 results and about a 40% increase from S&P’s previous forecast for 2021.

However, S&P noted the acquisition increases scale, but EBITDA generation will not match that of peers.

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