Moody's upgrades Gemini HDPE loan

Moody's Investors Service said it raised Gemini HDPE LLC's senior secured term loan due 2027, which has about $588 million of debt outstanding, to Ba2 from Ba3. The outlook was changed to stable from positive.

The upgrade reflects the improvement in the credit quality of Gemini's offtaker, Ineos Group Holdings SA as Moody's lifted Ineos to Ba2, stable from Ba3, positive on Oct. 29, the agency said.

“Offtaker credit quality is the primary driver of Gemini's credit assessment because Ineos wraps operational and market risk under its tolling agreement. Additionally, Ineos is deeply involved in the project as owner, operator, technology provider, and facility coordinator given Gemini's location within Ineos' manufacturing complex. Ineos provides guaranties under long-term tolling agreements that are structured to achieve a low but stable 1x debt service coverage ratio,” Moody’s said in a press release.

The revised outlook considers continued improvement of Gemini's offtaker/owner credit quality owing in part to the recent upgrade and stable outlook at Ineos, the agency said.

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