Moody's lowers Medallion view to stable

Moody's Investors Service said it changed Medallion Midland Acquisition, LLC's outlook to stable from positive.

Moody's also said it affirmed its B2 corporate family rating, B2-PD probability of default rating and B2 (LGD 4) senior secured term loan rating.

The outlook revision reflects the company's continued high leverage and a slower growth in volumes than initially expected, the agency said.

The rating should ultimately benefit from the location of the company's assets in the Midland Basin and anticipated de-leveraging due to increasing cash flow following the basin's growth in crude oil volumes, Moody's said.

The ratings reflect the company's very high financial leverage, the agency said, and significant reliance on a steep increase in crude oil transportation volumes through 2019 and 2020 to accomplish leverage improvement.

The rating is tempered by the company's small scale, limited operating track record and the volume risk involved in producer customers ramping up their respective production volumes, Moody's said.

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