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Moody’s ups Summit notes, rates preferreds
Moody's Investors Service said it assigned a B3 rating to Summit Midstream Partners, LP's (SMLP) proposed series A fixed- to floating-rate cumulative redeemable perpetual preferred units.
Net proceeds will be used to repay a portion of the outstanding borrowings under Summit Midstream Holdings, LLC's (Summit) revolving credit facility.
Moody's concurrently assigned a Ba3 corporate family rating, a Ba3-PD probability of default rating and a SGL-3 speculative grade liquidity rating to Summit Midstream Partners.
The outlook is stable.
Summit's B1 corporate family rating, B1-PD probability of default rating and SGL-3 speculative grade liquidity ratings were withdrawn (these ratings were effectively moved to Summit Midstream Partners), and its senior unsecured notes were upgraded to B1 from B2.
Summit's outlook remains stable.
Moody's also affirmed Summit Midstream Partners Holdings, LLC's (SMP Holdings) ratings, including its B3 corporate family rating, B3-PD probability of default rating, and B3 senior secured term loan rating.
The outlook is stable.
The proposed preferred units are rated B3, three notches below Summit Midstream Partners’ Ba3 corporate family rating.
“We believe that the B3 rating is more appropriate for the preferred units than the rating suggested by Moody's Loss Given Default Methodology, and the preferred units will receive 100% equity treatment. Summit's unsecured notes are rated B1, one notch below SMLP's Ba3 CFR, reflecting the priority claim of Summit's relatively large $1.25 billion revolver to its assets, in accordance with Moody's Loss Given Default Methodology,” Moody’s said in a news release.
“If the proportion of revolver debt to senior unsecured notes increases, Summit's notes could get downgraded.”
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