LOCAP Commercial Paper Affirmed at 'F1' by Fitch; Outlook Stable.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- LOCAP LOCAP Low Capacity LOCAP Low Combat Air Patrol LLC's 3(a)(2) commercial paper (CP) program is affirmed at 'F1' by Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. . The Rating Outlook is Stable. The CP program is fully supported by a $40 million 364-day revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility expiring in September 2006. LOCAP is a FERC-regulated crude oil pipeline that provides a connecting link between the deepwater oil port and storage facilities of LOOP LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control (issuer default rating 'A-' by Fitch, Outlook Stable) and St. James, LA for distribution to nearby refineries and Mid-Continent regions of the U.S. LOCAP's current owners are Marathon Petroleum Pipe Line LLC (49.9%), Shell Pipeline Co. LP (41.48%), and Ashland Inc. (8.62%). LOCAP's rating reflects the structural benefits provided to its debt obligations through the right to receive payments under throughput and deficiency (T&D) agreements with LOCAP's owners and/or their respective parent companies. Under these agreements, the owners are obligated ob·li·gate tr.v. ob·li·gat·ed, ob·li·gat·ing, ob·li·gates 1. To bind, compel, or constrain by a social, legal, or moral tie. See Synonyms at force. 2. To cause to be grateful or indebted; oblige. to ship or cause to be shipped through LOCAP enough oil to enable LOCAP to meet its operating expenses and debt service obligations. If LOCAP has a cash deficiency, each owner is obligated to advance LOCAP its pro rata share of the deficiency. Such cash advances are considered a credit against payments for future transportation. Obligations under the T&D agreements are several, not joint. Fitch views the risk of nonperformance under the T&D agreement as minimal given the importance of the LOCAP pipeline in meeting the refinery feedstock needs of the T&D obligors. From an operational standpoint, LOCAP is strategically positioned as the only pipeline connecting the offshore port and terminaling facilities of LOOP with CAPLINE, a major pipeline artery delivering crude oil into the Mid-Continent region of the U.S. This factor combined with a more focused marketing effort and the construction of additional storage capacity at St. James, LA has led to a steady rise in throughput volumes. In particular, LOCAP has been successful in attracting increasing levels of non-owner throughput. The temporary closure of LOOP's port facilities following Hurricane Katrina in September 2005 has had minimal operating and financial impact on LOCAP. In particular, the LOOP facilities were up and running again at full capacity within two weeks of Katrina's passing. Although Katrina continues to hamper LOOP's domestic crude business due to reduced crude oil production in the Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east , increased demand for higher margin import services has largely offset the shortfall. For further information on this issue, see the LOOP LLC rating action commentary dated Jan. 6, 2006. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, 'www.fitchratings.com'. Published ratings, criteria, and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance, and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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