(The following statement was released by the rating agency)

Overview

-- U.S. midstream energy partnership MarkWest Energy Partners L.P.

(MarkWest) and MarkWest Energy Finance Corp. (MarkWest Finance) are co-issuing

$1 billion of senior unsecured notes due 2023 to redeem a portion of the

partnership's unsecured debt and finance its 2013 capital spending program and

for general corporate purposes.

-- We are affirming our 'BB' corporate credit rating on MarkWest and

assigning a 'BB' issue rating and a recovery rating of '4' to the proposed

notes.

-- The stable outlook reflects our view that MarkWest will maintain

adequate liquidity, successfully execute its large organic growth plans in

2013, and achieve financial leverage in the mid-4x area.

Rating Action

On Jan. 7, 2013, Standard & Poor's Ratings Services affirmed its 'BB'

corporate credit rating on Denver-based MarkWest Energy Partners L.P. The

outlook is stable. At the same time, we assigned our 'BB' issue rating and '4'

recovery rating to MarkWest's and MarkWest Finance's proposed $1 billion

unsecured notes offering due 2023, indicating that creditors can expect

average (30% to 50%) recovery in the event of a payment default. The

partnership plans to use the net proceeds to redeem its 8.75% notes due 2018

and a portion of its notes due 2021 and 2022, partly fund its 2013 capital

spending program, and for general corporate purposes. As of Sept. 30, 2012,

MarkWest had total balance sheet debt of about $2.5 billion.

Rationale

The ratings on MarkWest Energy Partners L.P. reflect a 'fair' business risk

profile characterized by its strong competitive position in the Marcellus

Shale region, increasing scale and geographic diversity, and increasing

fee-based cash flow. Our ratings also consider an 'aggressive' financial risk

profile characterized by forecasted elevated financial leverage in 2013, the

partnership's commodity-price-sensitive contract mix, its limited asset

diversity, and the risk that a decrease in drilling could affect throughput

levels.

In our opinion, the partnership's growth in the Marcellus Shale and expansion

into the Utica Shale strengthens its competitive position in the northeastern

U.S. and will significantly expand the scale of its operations by the end of

2014. We believe these factors partly offset our expectation for high

financial leverage for most of 2013. We expect total adjusted debt to EBITDA

in the high-4x area for most of 2013 and a ratio of about 4.6x at year-end.

The elevated leverage ratio is driven by MarkWest's large capital spending

program (assumed to be $1.6 billion--the midrange of the partnership's 2013

guidance of $1.4 billion to $1.9 billion), which causes a significant cash

flow deficit. Key assumptions in our projections include our natural gas

liquid (NGL) price assumption of 96 cents per gallon, an NGL to crude price

relationship of 50% (with crude at $80 per barrel), a 10% growth rate in

gathering volumes, a 75% increase in processed volumes, and about 35% growth

in fractionated NGL volumes. We have also assumed that distributable cash flow

is at the lower end of the partnership's $500 million to $575 million guidance

range, which would result in distribution coverage between 1.1x and 1.2x.

We believe the partnership will have adequate liquidity to fund its 2013

organic growth initiatives. MarkWest plans to spend about 95% of its 2013

capital budget on its Liberty segment in the Marcellus and Utica shales. Joint

venture partner EMG will fund the first $500 million of capital spending to

develop midstream infrastructure in the Utica Shale, which supports near-term

credit quality, in our view. (MarkWest will fund 100% of the capital

requirements thereafter until it achieves 70% ownership).

On the positive side, MarkWest's business profile should improve following the

spending program. We expect fee-based cash flow to increase to about 60% of

the consolidated operating margin in 2013 from 47% in 2012. Almost all of the

MarkWest's growth projects are fee based. The partnership's

percentage-of-proceeds and keep-whole contracts comprise its remaining

operating margin, which expose it to significant commodity price risk. As

such, the remaining cash flows are subject to the risk of decreasing NGL

prices and a narrowing spread between NGLs and natural gas.

MarkWest's hedging program partly offsets this commodity price risk. In our

opinion, MarkWest has improved its NGL hedging policy by using more direct

product hedges rather than proxy hedges. We assume about 50% of its expected

2013 and 2014 equity volumes are hedged using direct hedges (As of Sept. 30,

2012, the partnership's equity volumes are hedged at 73% in 2013 and at about

22% in 2014).

Liquidity

We consider MarkWest's liquidity 'adequate' under our corporate criteria, with

sources divided by uses of about 1.2x during the next 12 months, pro forma for

the proposed notes offering and recent equity issuance. Pro forma for this

notes offering, we assume liquidity sources of $850 million in cash, $715

million in revolver availability (due to covenant limitations), and forecasted

FFO of about $500 million. In liquidity uses, we assume maintenance and growth

capital spending of $1.6 billion and distributions of about $440 million.

There are no near-term maturities.

Potential out-of-the-money hedges should not affect the partnership's

liquidity position, because MarkWest exclusively enters into contracts with

lenders under its credit facility whose hedge positions are secured. In

addition, the credit facility limits the partnership's ability to enter into

transactions with parties that require margin calls.

MarkWest's $1.2 billion credit facility matures in September 2017. The

partnership is in compliance with its bank covenants, and we expect it to

remain so in 2013 under our base-case NGL price assumptions. In 2013,

covenants have been amended, increasing the maximum total leverage (total debt

to EBITDA) ratio to 5.5x from 5.25x and the EBITDA credit for material

projects under construction to 20% of total EBITDA from 15%. As of Sept. 30,

2012, the partnership's total leverage was 4.3x, compared with a maximum level

of 5.25x, with an EBITDA cushion of about 20%.

Recovery analysis

The rating on MarkWest's senior unsecured debt is 'BB'(the same as the

corporate credit rating), and the recovery rating is '4', indicating our

expectation that lenders would receive average (30% to 50%) recovery if a

payment default were to occur. (For the complete recovery analysis, see the

recovery report to be published following this article on RatingsDirect.)

Outlook

The stable outlook reflects our view that MarkWest will maintain adequate

liquidity, successfully execute its large organic growth plans in 2013, and

achieve financial leverage in the mid-4x area by year-end. Higher ratings are

unlikely in the near term, but are possible over time as MarkWest executes its

capital projects, meaningfully expands into new resources plays, continues to

increase its fee-based cash flows, and keeps total debt to EBITDA in the

mid-3x area. We could lower the rating if total adjusted debt to EBITDA is

more than 4.75x at year-end 2013 or early 2014, which could occur due to cost

overruns associated with the capital spending programs or a weak commodity

price environment.

Related Criteria And Research

-- Key Credit Factors: Criteria For Rating The Global Midstream Energy

Industry, April 18, 2012

-- Methodology And Assumptions: Liquidity Descriptors For Global

Corporate Issuers, Sept. 28, 2011

Temporary contact numbers: Michael Grande 609-240-3731; Nora Pickens

401-741-1665

Ratings List

New Rating

MarkWest Energy Partners L.P.

MarkWest Energy Finance Corp.

Senior Unsecured

US$1 bil sr nts due 02/15/2023 BB

Recovery Rating 4

Ratings Affirmed

MarkWest Energy Partners L.P.

Corporate Credit Rating BB/Stable/--

Senior Unsecured BB

Recovery Rating 4

MarkWest Energy Finance Corp.

Senior Unsecured BB

Recovery Rating 4

Complete ratings information is available to subscribers of RatingsDirect on

the Global Credit Portal at www.globalcreditportal.com. All ratings affected

by this rating action can be found on Standard & Poor's public Web site at

www.standardandpoors.com. Use the Ratings search box located in the left

column.

(New York Ratings Team)

(e-mail: pam.niimi@thomsonreuters.com; Reuters Messaging: pam.niimi.reuters.com@reuters.net; Tel:1-646-223-6330;)

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