Moody's rates Summit Midstream notes B3

Moody's Investors Service said it assigned a B3 rating to Summit Midstream Holdings, LLC's expected $700 million second-lien secured notes due 2026.

The agency also changed Summit Midstream Partners, LP's outlook to stable from negative. "The stable outlook reflects Summit Midstream's gradually improving leverage metrics from weak levels," said Amol Joshi, a Moody's vice president and senior credit officer, in a press release.

Moody's affirmed SMLP's B3 corporate family rating, B3-PD probability of default rating and Caa3 perpetual preferred units rating. Moody's upgraded SMLP's speculative grade liquidity rating to SGL-3 from SGL-4.

The agency also affirmed the Caa2 rating of Summit Midstream's senior unsecured notes due 2025. The Caa2 rating on Summit Midstream's senior unsecured notes due 2022 remains unchanged and will be withdrawn upon redemption. The outlook was changed to stable from negative.

Concurrent with the new second-lien notes, Summit Midstream is expected to close and fund a new $400 million asset-based revolving credit facility, replacing its $1.1 billion revolver maturing in May 2022.

Summit Midstream plans to use the notes’ proceeds in conjunction with ABL borrowings to repay all revolver borrowings and senior unsecured notes due 2022.

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