Fitch: Enable's IPO Launch Meets Expectations and Provides for Growth Capex

NEW YORK--()--Enable Midstream Partners, LP (Enable, rated 'BBB' with a Stable Outlook) announced it has launched the IPO for the MLP. In Fitch ratings' view, the timing and the size of the offering meet the agency's expectations, and up to $604 million of common units are being offered. As previously expected, proceeds are to be used for general partnership purposes, including the funding of the expansion capex. As a limited partnership, Fitch expects Enable to spend significantly to grow EBITDA to support distributions. In 2014, Fitch expects growth capex to be in the range of $550 million-$600 million and maintenance capex to be approximately $200 million.

Leverage (defined by Fitch as debt-to-adjusted EBITDA) was 2.7x at the end of 2013, which is low for an MLP with a 'BBB' rating. Fitch believes leverage may be in the range of 3.0x-3.25x by the end of 2014 depending on how growth opportunities are funded over the balance of the year.

Liquidity remains strong at Enable and as of year-end 2013, there was $1.1 billion undrawn on the $1.4 billion revolving credit facility. In addition, there was $108 million of cash on the balance sheet. Near-term debt maturities include $200 million of notes maturing in July 2014 and a $250 million term loan due in 2015. Enable plans to refinance these two debt maturities along with the $1.05 billion Enable term loan due 2016 with a $1.5 billion senior unsecured note offering in the first half of 2014.

CenterPoint and OGE each have a 50% management interest in the general partner. Incentive distribution rights are to be split 40% to CenterPoint and 60% to OGE. Limited partnership interests following the IPO are expected to be owned 54.7% by CenterPoint, 26.7% by OGE, 12.4% by ArcLight and the remaining amount will be held by the public.

For additional details, please refer to 'Fitch Affirms Enable Midstream's Ratings at 'BBB'; Expects to Rate S-T & CP Ratings at 'F3'' which was published on Jan. 30, 2014, and is available at 'www.fitchratings.com'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Pipelines, Midstream, and MLP Stats Quarterly - Third Quarter 2013', Dec. 17, 2013;

--'2014 Outlook: Midstream Services', Dec. 10, 2013;

--'Credit Considerations for the GP/LP Relationship', Nov. 6, 2013;

--'Investor FAQs: Recent Questions on the Pipeline, Midstream, and MLP Sectors' Aug. 5, 2013;

--'Tax Event Risk and MLPs: Assessing a Change in Tax Status for MLPs', April 18, 2013;

--'The Top Ten Differences Between MLP and Corporate Issuers', Feb. 19, 2013;

--'Corporate Rating Methodology Including Short-Term Ratings and Parent and Subsidiary Linkage', Aug. 8, 2013.

Applicable Criteria and Related Research:

Corporate Rating Methodology: Including Short-Term Ratings and Parent and Subsidiary Linkage

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=715139

The Top Ten Differences Between MLP and Corporate Issuers

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=701812

Tax Event Risk and MLPs: Assessing a Change in Tax Status for MLPs

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=705496

Investor FAQs: Recent Questions on the Pipeline, Midstream, and MLP Sectors

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=715517

Credit Considerations for the GP/LP Relationship

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=721999

2014 Outlook: Midstream Services

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=726064

Pipelines, Midstream, and MLP Stats Quarterly - Third-Quarter 2013

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=726243

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Contacts

Fitch Ratings
Primary Analyst:
Kathleen Connelly, +1-212-908-0290
Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst:
Peter Molica, +1-212-908-0288
Director
or
Media Relations:
Brian Bertsch, New York, +1 212-908-0549
brian.bertsch@fitchratings.com

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Contacts

Fitch Ratings
Primary Analyst:
Kathleen Connelly, +1-212-908-0290
Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst:
Peter Molica, +1-212-908-0288
Director
or
Media Relations:
Brian Bertsch, New York, +1 212-908-0549
brian.bertsch@fitchratings.com