Moodys.com
Close
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

Terms of One-Time Website Use

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Rating Action:

Moody's upgrades MPLX to Baa2, Andeavor Logistics to Baa3

08 May 2019

Approximately $17.5 billion of rated debt affected

New York, May 08, 2019 -- Moody's Investors Service ("Moody's") upgraded MPLX LP's (MPLX) senior unsecured debt rating to Baa2 from Baa3. The outlook is stable. At the same time, Moody's upgraded the ratings of Andeavor Logistics LP (ANDX) including its senior unsecured debt to Baa3 from Ba1, and its preferred equity to Ba2 from Ba3. Moody's also withdrew ANDX's Ba1 Corporate Family Rating (CFR), its Ba1-PD Probability of Default Rating (PDR) and its SGL-3 Speculative Grade Liquidity rating. ANDX remains on review for upgrade where ANDX was initially placed on April 30, 2018.

On May 8, 2019, MPLX announced that it had agreed to acquire ANDX in an all units-for-units transaction valued at approximately $14 billion, including debt assumption and ANDX's $600 million preferred units. The acquisition is expected to close in the second half of 2019, at which point Moody's would conclude its review of ANDX with a likely upgrade to Baa2. Marathon Petroleum Corporation (MPC, Baa2 stable) holds the general partnership in MPLX, and in ANDX, the result of having acquired ANDX's general partner Andeavor in October 2018, and holds 64% of the combined entities' common units. MPC's ratings and outlook are unaffected by the transaction.

"The combination of MPLX and ANDX under a common general partner enhances MPLX's already considerable scale, cash flow stability and earnings diversification," commented Andrew Brooks, Moody's Vice President. "Moreover, credit metrics are projected to remain sound with leverage maintained under 4.5x and distribution coverage gaining strength."

Upgrades:

..Issuer: MPLX LP

....Senior Unsecured Shelf, Upgraded to (P)Baa2 from (P)Baa3

....Senior Unsecured Notes, Upgraded to Baa2 from Baa3

..Issuer: Andeavor Logistics LP

....Pref. Stock Preferred Stock, Upgraded to Ba2 (LGD6) from Ba3 (LGD6); Remains Under Review for Upgrade

....Senior Unsecured Notes, Upgraded to Baa3 from Ba1 (LGD4); Remains Under Review for Upgrade

Outlook Actions:

..Issuer: MPLX LP

....Outlook, Remains Stable

..Issuer: Andeavor Logistics LP

....Outlook, Remains Under Review

Withdrawals:

..Issuer: Andeavor Logistics LP

....Probability of Default Rating, Withdrawn , previously rated Ba1-PD

....Speculative Grade Liquidity Rating, Withdrawn , previously rated SGL-3

....Corporate Family Rating (Local Currency), Withdrawn , previously rated Ba1

RATINGS RATIONALE

MPLX functions as the principal vehicle for the expansion of MPC's midstream asset footprint. Its Baa2 rating reflects the significant portion of its Logistics and Storage asset base that is highly integrated with MPC's refining system, and is supported through contracts with MPC. Through its MarkWest subsidiary, MPLX is one of the nation's largest gatherers and processors (G&P) of natural gas, and is the largest midstream operator in the Marcellus and Utica Shale, with a growing presence in the US southwest. MPLX's G&P net operating margin is substantially supported by fee-based contractual arrangements, limiting its exposure to commodity price volatility, and supplementing the stable, fee-based earnings stream generated by the Logistics and Storage segment. Augmented by asset dropdowns from MPC, 2018's EBITDA increased over 70% from 2017 to $3.5 billion. MPLX has guided 2019's EBITDA at $3.9 billion.

Further supporting MPLX's rating is the strength of its stand-alone financial profile. Its target leverage metric is around 4x debt to EBITDA, which the company has largely maintained; reflecting Moody's standard adjustments, 2018's leverage was 4.5x. Distribution coverage was a solid 1.46x. In early 2018, MPC exchanged its general partner Incentive Distribution Rights (IDRs) in MPLX for newly issued MPLX common units. This simplification relieved MPLX of its IDR burden, reduced its cost of equity capital and enhanced organizational transparency.

MPC has used cash proceeds received from MPLX over a series of asset dropdowns to augment its funding of an aggressive share repurchase program ($13.1 billion over the period 2012-2018), in effect using MPLX's balance sheet as a further source of funds for share buybacks. Implicit in MPLX's Baa2 rating is the assumption that the company does not deviate from its stated leverage target, nor does MPC overuse MPLX's balance sheet as a source of funding for share repurchases. To the extent MPLX's growth rate eclipses that of MPC's refining, marketing and retail operations, MPC's consolidated leverage will likely continue to increase, absent MPC debt reduction.

ANDX's Baa3 rating derives strength from is ownership by Baa2 rated MPC, and further reflects its expanded scale and geographic reach following its 2017 acquisition of Western Refining Logistics. ANDX generates stable cash flows from a high level of long-term, fee-based contracts with minimum volume commitments. A structural simplification engineered in late 2017 eliminated the IDRs held by its general partner at the time, enhancing its cost of capital and improving organizational transparency. ANDX's asset base is strategic to, and integrated into, the legacy 1.1 million barrel per day of refining capacity operated by its former parent, now MPC, providing critical infrastructure to its core refining operations.

Also reflecting asset dropdowns and organic projects, which are focused in the high growth Permian and Bakken regions, ANDX's 2018 EBITDA grew 27% to $1.2 billion over 2017. The company has guided 2019's EBITDA to $1.4 billion. ANDX maintains a modest leverage profile at 4.2x debt/EBITDA at year-end 2018 (including Moody's standard adjustments), which is consistent with the company's target of 4x.

Pro forma for the combined entities' operations, consolidated EBITDA will be considerable, exceeding $5 billion, with the combined midstream logistics segment roughly 60% of consolidated EBITDA and G&P about 40%. Over 80% of revenues are fee-based, highly contracted and with significant throughput attributable to MPC, collectively generating a highly stable cash flow stream. Moody's expects pro forma debt leverage (including Moody's standard adjustments) to remain comfortably below 4.5x with distribution coverage maintained in the area of 1.4x.

Moody's regards MPLX's and ANDX's liquidity to be good. At March 31, MPLX had about $450 million outstanding under its $2.25 billion unsecured revolving credit facility, which has a July 2022 scheduled maturity date. Little balance sheet cash is held as a matter of course. Additionally, MPC makes available a $1 billion revolving credit facility to MPLX (and $500 million to ANDX, with a December 2023 scheduled maturity) to facilitate intercompany cash management activity, and is available as an additional source of liquidity. The facility is unsecured and has a December 4, 2020 scheduled maturity date. At March 31, no borrowings were outstanding under this facility. ANDX maintains two unsecured credit facilities; a $1.1 billion revolving credit facility and a $1.0 billion dropdown credit facility. Both credit facilities have January 29, 2021 scheduled maturity dates. At March 31, an about $1,400 million was outstanding under ANDX's two bank revolving credit facilities. Pro forma for the closing of MPLX's acquisition of ANDX, a combined credit facility providing for about $3.5 billion of liquidity is expected.

MPLX's outlook is stable, reflecting the stability of MPLX's largely fee-based revenue stream. The rating could be upgraded if MPC is upgraded from its Baa2, and MPLX's debt/EBITDA is maintained below 4x (including Moody's standard adjustments) with distribution coverage over 1.5x. Ratings could be downgraded if debt/EBITDA exceeds 4.5x, should the stability in MPLX's business profile deteriorate or should MPC's Baa2 rating be downgraded. Moody's expects to upgrade ANDX to Baa2 following the closing of the acquisition.

The principal methodology used in these ratings was Midstream Energy published in December 2018. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

MPLX LP and Andeavor Logistics LP are publicly traded midstream master limited partnerships (MLPs) headquartered in Findlay, Ohio, each of whose general partner is Marathon Petroleum Corporation, also headquartered in Findlay.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

With reference to the withdrawal of the ratings of Andeavor Logistics LP: The rating has been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Andrew Brooks
VP - Senior Credit Officer
Corporate Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Steven Wood
MD - Corporate Finance
Corporate Finance Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

No Related Data.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​​​​
Moodys.com