Moody’s gives Summit Midstream notes B3

Moody's Investors Service said it assigned a B3 rating to Summit Midstream Holdings, LLC's and co-issuer Summit Midstream Finance Corp.'s proposed $300 million of senior unsecured notes due 2022.

Summit's other ratings and stable outlook were unchanged.

Net proceeds will be used to repay debt outstanding under the company’s senior secured revolving credit facility.

"While this offering will provide some permanent financing to re-align its capital structure, Moody's expects Summit to continue its strategy of growing in size and scale through future drop-downs, to be likely funded with a moderate mix of debt and equity funding," Moody's vice president Amol Joshi said in a news release.

The B3 rating on the new senior notes due 2022 is the same as the company's existing notes given they will rank equally in right of payment and have the same guarantor arrangement. The notes are rated two notches below Summit's B1 corporate family rating under Moody's Loss Given Default Methodology because of the priority claim of its $700 million senior secured revolving credit facility.

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