OREANDA-NEWS. S&P Global Ratings today said affirmed its ratings, including its 'BBB' long-term corporate credit rating, on Enbridge Energy Partners L. P. (EEP). The outlook is stable reflecting our outlook on parent Enbridge Inc. (Enbridge).

"The affirmation follows our reassessment of EEP's group status following parent Enbridge's announced acquisition of Spectra Energy Corp.," said S&P Global Ratings credit analyst Tatenda Chirusa.

In our view, we do not believe the Spectra acquisition changes the relationship between EEP and Enbridge. There is no change in EEP's operations or funding arrangements with Enbridge and EEP continues to own the U. S. portion of Enbridge's integrated pipeline system. Therefore, our assessment of the relationship between EEP and Enbridge is unchanged based on our group rating methodology.

We view EEP's business risk profile as strong with a strong competitive position. The company has been steadily increasing the EBITDA contribution from the lower-risk liquids pipeline assets through organic growth and drop-down acquisitions. Liquids pipelines generate more than 90% of the forecast cash flows at EEP, with gas gathering and processing constituting the remainder. Underlying volumes at liquids pipelines bear no underlying commodity risk, and are tolled on a fee-for-service basis. Expansion capital is tolled under a cost-of-service methodology. We estimate that cost-of-service-based cash flows will rise to more than 65% by the end of 2018 from approximately 55% in 2015, strengthening the business risk profile.

The stable outlook on EEP reflects our stable outlook on Enbridge, incorporating our view that the partnership is highly strategic to the parent.

We could lower the SACP if debt-to-EBITDA trends stay above 5x, or if we see an increase in the commodity-related cash flows. Due to the high level of group support, we would maintain the corporate credit rating at one notch below the group credit profile of 'bbb+'. A negative rating action on the parent would flow to EEP.

An upgrade to the SACP could occur if financial metrics strengthen such that debt-to-EBITDA stays below 4.5x. We would not raise the corporate credit rating unless we raised the SACP on the group credit profile, or we raised the group credit profile. Likewise, a positive rating action on the parent would also flow to EEP.