Fitch rates Buckeye Partners notes BBB-

Fitch Ratings said it assigned a BBB- rating to Buckeye Partners, LP's issuance of $600 million in senior unsecured notes due 2026.

The proceeds will be used to fund a portion of the $1.15 billion purchase price of the VTTI BV acquisition announced earlier this week, Fitch said.

If the pending acquisition is not consummated or the purchase agreement is terminated, Buckeye Partners will be required to redeem all of the notes outstanding at 101% of the principal amount of the offering, plus accrued and unpaid interest, the agency said.

Buckeye has already completed the majority of the equity funding for the transaction, Fitch added.

VTTI is one of the largest independent global marine terminal businesses which, through its subsidiaries and partnership interests, owns and operates about 54 million barrels of petroleum products storage across 13 terminals located on five continents, the agency explained.

These marine terminals are predominately located in key global energy hubs, including Northwest Europe, the United Arab Emirates and Singapore, Fitch said.

The transaction is expected to close in early January 2017, the agency said.

Fitch said it believes the acquisition is modestly positive for Buckeye Partners from a strategic perspective, providing it with a sizable entry into global crude and refined product hubs in Asia, the Middle East and Europe.

The acquisition also provides an interest in an existing global terminal network with hard to replicate assets and operations, the agency said.

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