Enbridge notes offerings win Fitch investment-grade ratings
Enbridge is tapping debt markets with new U.S. dollar-denominated senior unsecured and junior subordinated notes as it manages funding for debt repayment, capital spending and broader corporate needs. The ratings align with the Canadian energy infrastructure group's existing 'BBB+' Long-Term Issuer Default Rating and Stable Rating Outlook.
Highlights
- Fitch assigned Enbridge Inc. a 'BBB+' rating for its senior unsecured notes and 'BBB-' for junior subordinated notes, with proceeds earmarked for debt repayment, capex, and corporate purposes.
- Enbridge's EBITDA leverage is projected at 5.2x for 2025, expected to improve toward 5.0x, aligning with a stable 'BBB+' profile due to regulated U.S. utility expansions.
- Over 98% of Enbridge's expected cash flow will derive from regulatory rate orders, long-term contracts, or Mainline Tolling Settlement, supporting strong cash flow visibility.
Rating action and funding use
As reported by Fitch Ratings, Enbridge Inc. has received a 'BBB+' rating for its senior unsecured notes offering and a 'BBB-' rating for its junior subordinated notes offering. The agency says proceeds will be used to repay existing debt, fund capex and support general corporate purposes.Fitch says the ratings reflect Enbridge's scale, business diversity and stable, visible cash flows. It also says constructive regulation continues to support the company's natural gas distribution, crude oil transportation and natural gas transmission businesses in Canada and the U.S., while leverage remains appropriate for the current rating level.
Credit profile and sector implications
Fitch expects Enbridge's EBITDA leverage, which stands at 5.2x in 2025, to trend toward 5.0x over the forecast period. The agency says that level is consistent with a 'BBB+' profile and adds that the company's expansion through low-risk, fully regulated U.S. utilities has improved its business risk profile.The agency also points to the size of Enbridge's asset base, including what it describes as the world's largest liquids pipeline system and Canada's largest natural gas distribution provider. More than 98% of expected cash flow is set to come from regulatory rate orders, long-term take-or-pay contracts or the Mainline Tolling Settlement framework, a mix that supports cash flow stability for a major North American midstream operator.
Earlier, we reported that Fitch rated Hainan Rubber’s proposed perpetual securities BBB- due to subordinated status and coupon deferral.
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