Moody’s assigns B1 to Western Midstream notes

Moody’s Investors Service said it assigned Ba1 ratings to Western Midstream Operating, LP’s proposed offerings of senior notes. Proceeds will be used to refinance Western’s $3 billion term loan. All existing ratings of Western and the developing outlook are unchanged.

“The proposed notes offering will refinance WES Operating’s $3 billion term loan and is leverage neutral,” said Andrew Brooks, a Moody’s vice president, in a press release.

“The rating’s developing outlook reflects the evolving structure of WES Operating’s future ownership, governance and financial policies following Occidental Petroleum Corp.’s (OXY) August 8 acquisition of Anadarko Petroleum Corp., the owner of WES’s general partner, and subsequent amendments to WES’ partnership agreement which have expanded limited partner unitholders’ rights,” Brooks said.

Western’s financial leverage has increased over the first nine-months of 2019 as heavy capital spending and the purchase of assets from Anadarko in February 2019 increased its outstanding debt while EBITDA growth faltered because of a slower than expected volume ramp up in the Delaware Basin.

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