X
<

US Midstream Companies with the Largest Capital Spending Plans

PART:
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Part 2
US Midstream Companies with the Largest Capital Spending Plans PART 2 OF 15

High Leverage Still a Concern for Energy Transfer Partners

Energy Transfer Partners’ outstanding debt

Energy Transfer Partners (ETP) ended 2Q17 with a total outstanding debt of $33.4 billion, which is 1.4% higher than the debt outstanding at the end of 2016. Of the total outstanding debt, $1.4 billion is maturing over the next 12 months.

High Leverage Still a Concern for Energy Transfer Partners

Interested in ETP? Don't miss the next report.

Receive e-mail alerts for new research on ETP

Success! You are now receiving e-mail alerts for new research. A temporary password for your new Market Realist account has been sent to your e-mail address.

Success! has been added to your Ticker Alerts.

Success! has been added to your Ticker Alerts. Subscriptions can be managed in your user profile.

ETP’s total outstanding debt has increased over the first two quarters of 2017 despite balance sheet strengthening measures. These measures included the legacy Energy Transfer Partners and Sunoco Logistics Partners merger, asset monetization, asset level financing, and JVs (joint ventures). That could be the reason for its aggressive capital spending during the first half of 2017.

Energy Transfer Partners’ leverage

Energy Transfer Partners’ pro forma net debt-to-adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) multiple was 5.7x at the end of 2Q17. That’s above the industry standard. However, ETP expects its leverage to fall by the end of 2017, driven by strong EBITDA growth, distribution savings, and the stake sale in the Rover Pipeline project to Blackstone. The transaction is expected to close by the end of October 2017. ETP could also continue to explore project stake sale transactions and asset sales in the coming quarters, as highlighted in the 2Q17 earnings call.

ETP’s high leverage remains a major concern in the current challenging market price environment. That could possibly be the reason it’s continuing to raise money from equity capital markets despite its high cost of equity capital and ample liquidity at its credit facilities (approximately $3.0 billion as of June 30, 2017). ETP recently announced a ~$1.2 billion offering resulting in a significant dilution to its existing shareholders.

X

Please select a profession that best describes you: