S&P cuts Summit Midstream

S&P said it downgraded Summit Midstream Partners LP to SD from CCC and Summit Midstream Holdings LLC’s senior unsecured debt to D from CCC-.

Summit Midstream Partners announced it repurchased about $90 million of its 2022 senior unsecured notes and 2025 senior unsecured notes for about $50 million in cash.

S&P said it considers this a distressed transaction because of the discounted trading levels and noteholders getting less than the securities’ original promise.

“We are affirming our C rating on SMLP's preferred stock and placing it on CreditWatch with negative implications to highlight potential additional ratings pressure if the preferred equity exchange (settlement date close July 22) is executed. We could view this exchange as a selective default as holders would receive less than par,” S&P said in a press release.

SMP Holdings is an unrestricted nonstrategic subsidiary of the partnership, the agency said. “The term debt has no guarantees and is non-course to SMLP. As a result, we are affirming the CCC issuer credit rating on SMP Holdings and putting it on CreditWatch with negative implications to highlight the possibility of a near-term term loan restructuring,” S&P said.

S&P also affirmed SMP Holdings' CC ratings and placed the senior secured debt rating on CreditWatch with negative implications.

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