Fitch Rates Enterprise Products Operating LLC's $1.1B Sr. Unsec Notes 'BBB-'; Outlook Stable

Business Wire, April 1, 2008

NEW YORK -- Fitch has assigned a 'BBB-' rating to $1.1 billion of senior notes issued by Enterprise Products Operating LLC's (EPO). The sale was split into two tranches with $400 million 5.65% senior notes due 2013 and $700 million 6.50% senior notes due 2019. The notes are unconditionally guaranteed by Enterprise Products Partners, L.P. (EPD). The proceeds will be used to repay a portion of the company's multi-year revolving credit facility.

Fitch rates the debt of EPO as follows:

--Issuer Default Rating (IDR) 'BBB-';

--Senior unsecured debt 'BBB-';

--Junior subordinate notes (hybrids) 'BB '.

The Rating Outlook is Stable.

The ratings of EPO continue to be supported by the size, diversity and integration of the company's energy operations as well as the stable and predictable nature of operating cash flows from primarily fee-based contracts. 2008 is a transition year for EPO as it begins to recognize cash flow from over $2.5 billion in capital programs placed in service in 2007 and the first quarter of 2008. As the company continues to complete approximately $1 billion of the capital programs announced in 2006 and 2007, Fitch expects EPO's credit metrics to recover from the impact of its aggressive capital spending and remain in-line with its 'BBB-' credit rating. The ratings also recognize management's proven track record of supporting the company's credit ratings and its focus on organic growth projects which generally provide greater return and less risk over the long-term than acquisitions.

Offsetting concerns include the structural and functional ties with Enterprise GP Holdings L.P. (EPE, IDR 'BB-'), owners of EPO's 2% general partner interests, and EPCO Holdings, Inc. (EPCO), which have weaker credit profiles than EPO, from which they generate a sizeable percentage of their respective cash flows. This concern is partially mitigated by the additional access to capital afforded by EPE and EPCO and their track record of making equity investments into EPO.

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