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Highlights of Credit and Finance

Moody’s Modifications NGL Energy’s Outlook To Unfavorable, Verifies Ba3 CFR

Roughly $850 million of rated financial obligation impacted

New york city, October 28, 2015– Moodys Investors Service (Moodys) altered NGL Energy Partners LPs (NGLEP).
rating outlook to unfavorable from stable. At the very same time Moodys.
affirmed NGLEPs Ba3 Corporate Household Rating, Ba3-PD.
Probability of Default Rating (PDR), B2 senior unsecured notes score.
along with the SGL– 3 Speculative Grade Liquidity Score.

The unfavorable outlook reflects NGLs already elevated monetary.
take advantage of and heavy capital spending through 2016 that could keep leverage.
(Moodys changed) above 5x for most of calendar 2016,.
commented Sajjad Alam, Moodys AVP-Analyst.
Even though approximately half of NGLs gross margin is backed.
by fixed-fee and multi-year agreements, 2 of the.
collaborations three biggest company sectors (water options and.
unrefinedpetroleum logistics) are exposed to significant volume dangers and these.
companies will deal with strong headwinds in an ongoing low commodity cost.
environment. Furthermore, the company will have to access.
capital markets to preserve adequate liquidity throughout 2016.

Issuer: NGL Energy Partners, LP.

Outlook Action:.

… Changed to Negative from Steady.

Ratings Affirmed:.

. Corporate Household Score, Affirmed Ba3.

. Probability of Default Score, Affirmed Ba3-PD.

. Senior Unsecured Notes, Affirmed B2.

… Speculative Grade Liquidity Rating,.
SGL-3.

SCORE RATIONALE.

The Ba3 Business Household Rating (CFR) shows NGLEPs boosted.
leverage and ongoing high level of capital spending, portfolio of.
numerous discrete possessions; substantial exposure to weather,.
throughput volumes, product prices and basis differentials;.
and the generally low barriers to entry for most of its service-oriented.
businesses. The rating likewise reflects the highly acquisitive nature.
of the management group, the Master Limited Collaboration company.
design that requires big continuous circulations and the challenging industry.
landscape that will likely slow volume and margin growth through 2017.
The Ba3 CFR is supported by NGLEPs enhancing scale, diversified.
and rather vertically incorporated operations across a number of crucial United States oil.
and gas basins that lower cash flow volatility; a high percentage.
of fee-based money flows from its water solutions, terminals/storage,.
and logistics businesses; and an experienced management group with significant.
ownership stake. The company keeps to improve its business.
threat profile by focusing on enhancing the proportion of fee based revenues.
under medium and long term contracts.

NGLEPs should have sufficient liquidity through 2016, which.
is caught in our SGL-3 score. The collaboration has directed.
to $750 million of capex in financial 2016 (ending March 31,.
2016) and will produce considerable unfavorable complimentary money circulation after unitholder.
distributions. NGL will likely requirehave to access the capital markets.
to maintain adequate liquidity. The collaboration has a $1.4.
billion revolving working capital facility and an $858 million.
revolving acquisition facility both which were significantly made use of.
as of June 30, 2015 (leaving ~$690 million combined availability).
NGLEP changed the credit arrangement to be able to go up to $400.
countless ability in between each facility. The credit facilities.
fully grown in November 2018 and has two financial covenants (a maximum leverage.
ratio of 4.25 x and a minimum interest coverage ratio of 2.75 x),.
and we expect the business to be in compliance with these covenants through.
2016. We keep in mind that the working capital center financial obligation is excluded.
from the covenant estimations. The partnerships alternate liquidity.
is restricted given the majoritymost of its assets are overloaded.

The CFR could be downgraded if it appears that take advantage of will continue to be above.
5x through the end of calendar 2016. An upgrade is unlikely through.
2016, however looking further out, an upgrade is possible if NGLEP.
can minimize leverage near 3.5 x and maintain circulation protection.
above 1.3 x. A greater proportion of fee-based money.
circulations generated under long term agreements would likewise be viewed favorably.
for the ratings.

The unsecured notes are rated B2, two notches listed below the Ba3 CFR.
due to the fact that of the large percentage of secured financial obligation in NGLEPs capital structure.
NGLEP has roughly $2.2 billion of secured credit centers.
and $250 countless secured notes that have an all-asset.
pledge and a top priority claim over unsecured lenders. In order for.
the notching from the CFR to narrow to one score level, the relative.
percentage of unsecured debt needs to grow significantly relative to secured.
financial obligation.

The primary approach used in this rating was Global Midstream Energy.
published in December 2010. Kindly take a look at the Credit Policy page on.
www.moodys.com for a copy of this method.

NGL Energy Partners, LP is a diversified midstream Master Limited.
Partnership headquartered in Tulsa, Oklahoma.

REGULATORY DISCLOSURES.

For scores provided on a program, series or category/class of financial obligation,.
this announcement provides particular regulatory disclosures in relation.
to each score of a consequently issued bond or note of the exact same series.
or category/class of financial obligation or pursuant to a program for which the ratings.
are obtained specifically from existing scores in accordance with Moodys.
score practices. For ratings provided on an assistance supplier,.
this statement offers certain governing disclosures in relation.
to the rating action on the assistance supplier and in relation to each certain.
rating action for securities that derive their credit ratings from the.
support suppliers credit score. For provisional scores,.
this announcement provides particular regulatory disclosures in relation.
to the provisional rating appointed, and in relation to a definitive.
score that may be assigned subsequent to the final issuance of the debt,.
in each case where the transaction structure and terms have actually not changed.
prior to the project of the definitive score in a manner that would.
have influenced the rating. For further info please take a look at the.
ratings tab on the issuer/entity page for the particular issuer on www.moodys.com.

For any afflicted securities or ranked entities receiving direct credit.
assistance from the main entity(ies) of this rating action, and.
whose ratings may alter as a result of this rating action, the.
associated governing disclosures will be those of the guarantor entity.
Exceptions to this method exist for the following disclosures,.
if appropriate to jurisdiction: Ancillary Solutions, Disclosure.
to rated entity, Disclosure from ranked entity.

Regulatory disclosures included in this press release apply to the credit.
rating and, if appropriate, the associated rating outlook or score.
evaluation.

Please take a look at www.moodys.com for any updates on modifications to.
the lead score expert and to the Moodys legal entity that has released.
the rating.

Kindly take a look at the scores tab on the issuer/entity page on www.moodys.com.
for extra regulatory disclosures for each credit rating.

Sajjad Alam
Asst Vice President – Analyst
Corporate Financing Group
Moodys Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
USA.
REPORTERS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Steven Wood
MD – Corporate Financing
Business Financing Group
REPORTERS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Workplace:
Moodys Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
USA.
REPORTERS: 212-553-0376
CUSTOMERS: 212-553-1653

Moodys modifications NGL Energys outlook to negative, affirms Ba3 CFR

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