S&P revises Gemini HDPE recovery loan to 2

Standard & Poor’s said it affirmed the preliminary B+ senior secured rating on Gemini HDPE LLC’s proposed $420 million first-lien senior secured term loan B and revised the preliminary recovery rating to 2 from 3.

The outlook is stable.

Gemini is a 50-50 joint venture between Ineos AG and Sasol Ltd. via wholly owned indirect subsidiaries Ineos Gemini HDPE Holding Co. LLC and Sasol Chemicals North America LLC.

It intends to raise $524 million of capital to fund the construction of a bimodal high-density polyethylene (HDPE) plant in Texas, S&P said.

The proposed funding sources include a $420 million term loan B and $104 million of equity, S&P said.

The rating on the loan is weak-linked to the rating on Ineos Group Holdings SA, which guarantees 50% of the project’s debt and all other payment obligations during the construction and operational phases, the agency said.

Sasol Financing (Pty.) Ltd., a subsidiary of Sasol Ltd., guarantees the remaining 50% of Gemini’s debt and counterparty payment obligations, S&P said.

Relative to other rated projects, Gemini is unique in that its parent companies fully guarantee the project’s debt service, making it immune to construction and operating risks, the agency said.

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