OREANDA-NEWS. Fitch Rating's recent downgrade of Enable Midstream Partners' (Enable) Long-term Issuer Default Rating (IDR) to 'BBB-'(Stable Outlook) from 'BBB' is negative for its sponsor, CenterPoint Energy (CNP; IDR 'BBB'/Stable Outlook). However, it does not warrant a negative rating action at this time.

CNP's 'BBB' IDR has incorporated the volatility and risk profile of Enable's midstream services business. Since the formation of Enable, Fitch has stated that the initial joint venture and the master limited partnership (MLP) will not meaningfully alter the CNP's credit profile, as Fitch believes CNP will continue to exercise substantial control and will likely support Enable during stressful periods. Such support takes forms of reduced distribution from Enable and/or direct equity injections.

Fitch believes that at the 'BBB' rating level, CNP currently has some room in its credit ratios to provide a reasonable amount of support to Enable. Fitch previously indicated that, on a sustained basis, CNP's ratings and Outlook could be under pressure if Debt to EBITDAR is above 4.5x and/or FFO fixed charge coverage is below 4x. Over the last three years, Fitch calculates that the proportionately consolidated Debt/EBITDAR and FFO fixed charge coverage averaged 3.7x and 4.3x respectively.

Should Enable's credit profile further deteriorates, CNP would need to prudently manage its capital allocation and balance the needs to maintain its credit ratings, shareholder returns, and Enable's capital requirements.

Enable's other sponsor, OGE Energy Corp's (OGE; IDR 'A-'/Stable Outlook) rating will be addressed separately and in conjunction with the pending resolution of its environmental compliance plan.

On Jan. 22, 2016, Fitch Ratings downgraded Enable's Long-term IDR from 'BBB' to 'BBB-' with a Stable Outlook primarily due to its increasing leverage, the struggling gathering and processing segment, given the low natural gas and natural gas liquids prices, and limited capital market access. Enable's Stable Outlook is supported by its fee-based earnings, its relatively large size, diversity of assets and customers and investment grade utility sponsors.