Crestwood Equity’s outstanding debt
Crestwood Equity Partners (CEQP) ended 2Q16 with total outstanding debt of $3.7 billion, 20.7% lower than its total debt outstanding at the end of 2015.
Crestwood Equity’s net debt-to-EBITDA
Crestwood Equity’s net debt-to-EBITDA (earnings before interest, tax, depreciation, and amortization) multiple stood at 3.3x at the end of 2Q16. This level was below the industry standard. MLPs generally target a ratio of between 4.0x and 4.5x. Moreover, CEQP’s leverage situation has improved compared to those of most of its peers.
Crestwood Equity has announced a number of measures by which to improve its leverage position. The partnership recently completed a 50-50 joint venture with Consolidated Edison to own and develop Crestwood Equity’s existing natural gas pipeline and storage assets serving the Northeast market.
CEQP will likely use the $975 million in proceeds from the transaction to repay debt. Apart from this, the partnership has announced distribution cuts. We’ll read more about these cuts in the next article.