September 10, 2012 / 6:45 PM / 5 years ago

TEXT-S&P rates ONEOK Partners notes offering 'BBB'

2 Min Read

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.) 

     -- 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


ONEOK Partners L.P.
 Corporate Credit Rating               BBB/Stable/A-2

Rating Assigned

ONEOK Partners L.P. 
$1.2 Bil. Senior Unsec. Notes          BBB

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