S&P pumps up Epic Crude

S&P said it raised its ratings on Epic Crude Services LP and its senior secured debt to B- from CCC+. The 3 recovery rating on the debt is unchanged, indicating meaningful (50%-70%; rounded estimate: 55%) recovery if Epic defaults.

“Epic's credit metrics continue to improve driven by strengthening asset utilization and an improving contract profile. As demand for crude exports remains high and pipelines in Corpus Christi, Texas, are trending full, Epic benefits from its strategic asset location. The company has operated at about 90% of capacity, which is higher year over year. Given strong demand pull, we believe Epic has the ability to continue securing contracts at favorable rates. We estimate about 60%-70% of contracted volumes are underpinned by minimum volume commitments over 2023 and 2024, improved from 2022,” S&P said in a press release.

The agency said it now expects Epic’s S&P Global Ratings-adjusted debt to EBITDA in the 7x area in 2023, trending to the 6x area in 2024.

The outlook is stable.

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