Moody's cuts Summit Midstream Partners

Moody's Investors Service said it downgraded Summit Midstream Partners, LP's corporate family rating to B2 from Ba3, probability of default rating to B2-PD from Ba3-PD, perpetual preferred units rating to Caa2 from B3 and speculative grade liquidity rating to SGL-4 from SGL-3.

Moody's also downgraded Summit Midstream Holdings, LLC's senior unsecured notes rating to Caa1 from B1.

Concurrently, Moody's downgraded Summit Midstream Partners Holdings, LLC's CFR to Caa2 from B3, PDR to Caa2-PD from B3-PD and senior secured term loan rating to Caa2 from B3.

"Summit Midstream's leverage is gradually increasing as it struggles to grow operating cash flow," said Amol Joshi, a Moody's vice president and senior credit officer, in a press release. "The company should generate modest free cash flow in 2020, but it faces rising debt refinancing risk in 2022 while the company strives to fund its Double E Project as well as extinguish its remaining deferred purchase price obligation associated with previous drop downs."

The outlook negative for the three companies.

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