INTERNAL USE ONLY DO NOT DISTRIBUTE IN PART OR IN WHOLE Corporate Credit > U.S. Investment Grade ONEOK Partners LP Updated: November 2, 2015 Trade Idea: Buy ONEOK Partners 10-year bonds Investment Rationale: From a relative value perspective, we are maintaining our outperform relative value recommendation. We think OKS spreads are wider than similar pipeline names due to the market perception that the drop in oil prices will have a greater impact on OKS than some of the pipeline names with less NGL leverage. While that may be true, we think NGL prices likely have limited additional downside from the current levels since they are at a 10-year low. We also believe the market is discounting the increased level of fee-based contracts, which include minimum volume commitments. In addition, when we compare the OKS G-spread to lower-rated pipeline names, like SXK, KMI and ETP, we think OKS bonds look attractive. We think OKS should eventually compress closer to the comparable pipeline names, or at a minimum, limits the downside if the ratings are lowered. OKS reported EBITDA of $701MM for the six-months ended 6/30/15, down 7% from the same period last year. Interest expense increased 18%, which caused EBITDA/interest coverage to drop to 4.20x from 5.32x last year. Leverage was also weaker at 5.58x as of 6/30/15 compared to 4.82x at YE 2014. Despite the weak results for the first half of the year, the company reaffirmed its full-year EBITDA guidance range of $1.51 billion to $1.73 billion based on the expectation of new well connection, completion of field compression projects, an increase in the capture of natural gas currently being flared and new natural gas processing plants being connected to the NGL pipelines in the Mid-Continent and Rocky Mountain regions. We expect some improvement over the next few quarters based on the factors noted by the company in the reaffirmation of its full-year EBITDA guidance, we need to see some evidence of that impr