S&P ups Summit Midstream Partners

S&P said it raised the ratings on Summit Midstream Partners LP and its senior unsecured debt to CCC from SD and D, respectively. The 4 recovery rating on the debt reflects the expectation of average (30%-50%; rounded estimate: 30%) recovery in the event of a default.

Also, S&P upgraded the preferred stock rating to C from D to reflect the subordination and deferability.

The agency affirmed Summit Midstream Partners Holdings LLC’s CCC rating and the CC rating on its senior secured debt. The recovery rating remains 6 indicating S&P’s forecast for negligible (0%-10%; rounded estimate: 0%) recovery in the event of default.

The upgrades follow the partnerships completing its distressed preferred equity exchange and senior unsecured distressed debt repurchases, S&P said.

“In aggregate, we have removed approximately $165 million from our adjusted SMLP debt balance based on these transactions. While we view these transactions as distressed, as holders received less than the original promise of securities, we recognize the partnership is taking progressive steps to clean up the balance sheet,” S&P said in a press release.

The outlook is negative.

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