S&P cuts Glass Mountain

S&P said it cut Glass Mountain Pipeline LLC and its term loan to CC from CCC. The term loan’s 3 recovery rating (50%-70%; rounded estimate: 55%) is unchanged.

“The downgrade reflects our view that a default is a virtual certainty. We expect Glass Mountain will likely breach the 1.1x minimum debt-service coverage ratio covenant on its $300 million term loan B when it submits its compliance certificate for the period ended March 31, 2021, unless its financial sponsor, BlackRock Inc., provides an equity cure. However, even with that, we still believe the company's capital structure is unsustainable and that it will miss an interest payment, file for bankruptcy, or complete a distressed debt exchange or restructuring,” S&P said in a press release.

The agency noted Glass Mountain hired debt advisers, and its bond investors and BlackRock are negotiating the capital structure.

The outlook is negative.

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