Fitch pares M6

Fitch Ratings said it downgraded M6 ETX Holdings II MidCo LLC's long-term issuer default rating to B from B+ and senior secured instrument ratings to BB-/RR2 from BB/RR2.

“The downgrade reflects expected higher leverage above Fitch's previous negative sensitivity level, as most post-inception periods have shown lower than expected throughput, and consequently, significantly lower than expected EBITDA. Risks associated with potentially sustained lower natural gas prices and/or a further delayed increase in M6 gathering and processing (G&P) volumes remain,” Fitch said in a press release.

The agency added, “Depressed natural gas prices in the U.S. throughout 2023 and into 2024 have resulted in M6 throughput volumes largely underrunning expectations for most months since inception. More broadly, after a period of high growth dating back to 2018, production in the Haynesville leveled off in 2023, where rigs in the basin dropped from roughly 70 in the beginning of 2023 to around 40 at the end of the year.”

However, Fitch said volume could grow in 2025.

The outlook is stable.

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