TEXT-S&P rates ONEOK Partners notes offering 'BBB'
Sept 10 - Standard & Poor's Ratings Services today assigned its 'BBB' issue rating to ONEOK Partners L.P.'s $1.2 billion senior unsecured notes offering. The partnership intends to use proceeds to repay borrowings under its commercial paper program and for general corporate purposes, including funding growth capital spending and general working capital. "The ratings on Tulsa, Okla.-based master limited partnership ONEOK Partners L.P. reflect the consolidated credit quality of ONEOK Partners' operating segments and significant ownership [about 43%] and control by parent ONEOK Inc.," said Standard & Poor's credit analyst Michael Grande. Under our 2012 base-case forecast, we project that the partnership achieves EBITDA of about $1.3 billion and that it funds its growth plans with a balance of debt and equity. Our forecast also assumes robust growth in gathering and fractionation volumes of 20% and 10%, respectively. At the parent level, we assume modest revenue growth for the distribution business and a negligible cash flow contribution from the energy services segment. This translates into total debt to EBITDA between 3.5x and 4x for the partnership and between 3.75x and 4.25x for ONEOK Inc. on a consolidated basis. As of June 30, 2012, ONEOK Partners had about $3.5 billion in debt, a debt to EBITDA ratio of about 2.6x, and adequate liquidity. (For the corporate credit rating rationale, see the summary analysis on ONEOK Partners published on June 27, 2012.) RELATED CRITERIA AND RESEARCH -- Standard & Poor's Revises Its Natural Gas Liquids Price Assumptions For 2012, 2013, And 2014, June 11, 2012 -- Key Credit Factors: Criteria For Rating The Global Midstream Energy Industry, April 18, 2012 -- Liquidity Descriptors For Global Corporate Issuers, Sept. 28, 2011 RATINGS LIST ONEOK Partners L.P. Corporate Credit Rating BBB/Stable/A-2 Rating Assigned ONEOK Partners L.P. $1.2 Bil. Senior Unsec. Notes BBB