Markwest Energy Partners LP (NYSE:MWE) Proposed Merger Gains Fitch Rating


Dallas, Texas 07/14/2015 (Financialstrend) – Markwest Energy Partners LP (NYSE:MWE) Monday’s announcement of merger with MPLX MP is regarded as positive growth opportunity for the company, forecasts Fitch Ratings. The merger is regarded as long-term and positive combination. At the same time it is not expected to negatively impact the backers of the MPLX, Marathon Petroleum Corporation. The merger is touted to be unit-for-unit trading, with new units being issued to MWE unitholders at fixed ratio of 1.09 times.

Markwest Energy Partners LP (NYSE:MWE) merger will not affect Marathon Petroleum Corporation negatively. As per present terms and conditions, MPC will bring in $675 million in cash to facilitate the transaction. MPC inventory too is representative approximately of $1.6 billion in its annual EBITDA. Besides, it has its own strong credit fundamentals which will remain outside of the deal guidelines. Besides, the outlook for the company’s near-term cash flow generation remains positive as well.

MPC as the backer of Markwest Energy Partners LP (NYSE:MWE) holds strong fundamentals and is therefore well-poised for growth, post the merger. Fitch rating for the merger is considered positive for the refining sector. This is expected to lower MPCs near term dropdown proceeds. It also provides an opportunity to look at significant growth opportunity with organic midstream projects. All of this will be possible along with solid investment grade credit profile. Another reason for Fitch to rate the company as positive long-term investment is its strong financial fundamentals. The company has the bandwidth to fund its own midstream development project. These are ones with longer lead times as well as larger up-front capital loss. The increase in MPC’s inventory is expected to include dropdowns to MPLX given the build out in Marcellus as well as Utica infrastructure, in the eventuality of a slowdown. Finch ratings continue to drive Markwest Energy Partners LP (NYSE:MWE) stock market performance.