Buckeye proposed notes rated BB by Fitch as 2026 debt refinancing supports leverage outlook

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Buckeye notes BB rating refinance

Highlights

Buckeye's proposed senior unsecured notes rated BB by Fitch, with proceeds and cash to fully repay 2026 senior unsecured notes.
Fitch expects Buckeye's pro forma EBITDA leverage at 4.6x for Q2 2026 and forecasts leverage to remain below 5.0x, supported by stable distributions from FLNG Liquefaction 2, LLC.
In H1 2026, Buckeye's pipelines and terminals segment sees a 2.7% decline in daily throughput volumes, offset by storage utilization rising to 74.8% and higher pipeline tariff rates.

Refinancing plan and rating rationale

As reported by Fitch Ratings, the proposed senior unsecured notes will rank equally with Buckeye's existing senior unsecured notes, and the proceeds, together with available cash, will be used to fully repay senior unsecured notes maturing in 2026.

Fitch says Buckeye's ratings reflect an expectation that leverage remains below 5.0x over the forecast period. That view is supported by the company's informal financial policy, midstream-focused capital spending, stable base business performance and consistent distributions from FLNG Liquefaction 2, LLC, which Fitch rates BBB with a Positive Outlook.

Fitch calculates Buckeye's last-12-month second-quarter 2026 EBITDA leverage at 4.6x on a pro forma basis for the proposed refinancing. The agency expects a modest capex budget and continued distributions to Buckeye's financial sponsor, which it says should help keep leverage at or below 5.0x.

Midstream performance and credit implications

In the first half of 2026, Buckeye's pipelines and terminals segment shows broadly resilient EBITDA. Average daily pipeline throughput volumes fall 2.7% year over year, pressured by weaker gasoline, intermediate products and liquified petroleum gas volumes, but that underperformance is largely offset by higher storage utilization and stronger average pipeline tariff rates.

Total average storage utilization rises to 74.8% from 68.9% in the first half of 2025, while terminal throughput volumes increase 1.1% year over year, driven by higher distillate volumes across Buckeye's Northeast U.S. operations.

Fitch expects Buckeye's growth to remain focused on its existing midstream network rather than large expansion projects. The agency says the company's substantially built-out asset base should limit major capital spending, with several modest 2026 projects aimed at optimizing the system in response to customer demand.

Fitch also notes Buckeye's parent-subsidiary relationship with Buckeye Energy Holdings. Using consolidated metrics, the agency assesses the parent's Standalone Credit Profile at low 'bb', and says those linkage considerations limit the rating difference between the two entities to one notch.

Our earlier coverage of Fitch’s rating review of TOI TOI & DIXI Holding AG highlighted the agency’s decision to affirm the company’s long-term issuer rating at ‘B’ while assigning a Negative Outlook. Fitch pointed to weaker demand conditions, pricing uncertainty and pressure on cash generation in the group’s core markets as key constraints on near-term credit improvement.

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