Fitch raises USA Compression Partners

Fitch Ratings said it upgraded the long-term issuer default rating of USA Compression Partners, LP (USAC) to BB from BB- and the senior unsecured ratings of USAC and co-issuer USA Compression Finance Corp.'s senior unsecured notes to BB/RR4 from BB-/RR4. The agency also raised USAC's senior secured rating on its secured asset-based revolving credit facility to BBB-/RR1 from BB+/RR1.

“The upgrade reflects a multitude of structural tailwinds supporting the business: long and growing lead times for new compression units, gas-to-oil ratios increasing, oil prices remaining above various basin break evens, and LNG export facilities moving forward. Along with these tailwinds, USAC has been able to increase its contract lengths, contract rates, and utilization rates while also having opportunities to "high-grade" its customer base. Consequently, Fitch expects leverage to decrease over the forecast,” the agency said in a press release.

Fitch said it expects USAC’s leverage to decline to 5x in 2023 from 5.6x in 2022.

The outlook is stable.

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