MidContinent Express Pipeline LLC
Original Volume No. 1
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Effective Date: 04/10/2009, Docket: RP09-136-000, Status: Effective
Original Sheet No. 175 Original Sheet No. 175
GENERAL TERMS AND CONDITIONS
both S&P and Moody's, the lower rating applies. For the purposes of
this Section 12, the term "tangible net worth" shall mean for a
corporation the sum of the capital stock, paid-in capital in excess
of par or stated value, and other free and clear equity reserve
accounts less goodwill, patents, unamortized loan costs or
restructuring costs, and other intangible assets. Only actual
tangible assets are included in MEP's assessment of creditworthiness.
In comparing the overall value of a Shipper's contract to tangible
net worth for credit evaluation purposes, MEP will compare the net
present value of the demand or reservation charge obligations under
such contracts to Shipper's current tangible net worth. If a Shipper
has multiple service agreements with MEP, then the total potential
fees and charges of all such service agreements shall be considered
in determining creditworthiness.
(3) If Shipper does not meet the criteria
described above, then Shipper may request that MEP evaluate its
creditworthiness based upon the level of service requested relative
to the Shipper's current and future ability to meet its obligations.
Such credit appraisal shall be based upon MEP's evaluation of the
following information and credit criteria:
(i) S&P and Moody's opinions, watch
alerts, and rating actions and reports, rating, opinions and other
actions by Dun and Bradstreet and other credit reporting agencies
will be considered in determining creditworthiness.
(ii) Consistent financial statement
analysis will be applied by MEP to determine the acceptability of
Shipper's current and future financial strength. Shipper's balance
sheets, income statements, cash flow statements and auditor's notes
will be analyzed along with key ratios and trends regarding
liquidity, asset management, debt management, debt coverage, capital
structure, operational efficiency and profitability.
(iii) Results of bank and trade reference
checks and credit reports must demonstrate that a Shipper is paying
its obligations in a timely manner.