S&P lifts Epic Y-Grade Services

S&P said it raised its ratings on Epic Y-Grade Services LP and its senior secured debt to B- from CCC+. The 4 recovery rating on the debt is unchanged, indicating average (30%-50%; rounded estimate: 40%) recovery in default.

“Y-Grade's improved asset utilization and contract profile lead us to view its business risk profile more favorably. The company continues to benefit from its strategically located assets in the Permian Basin and Corpus Christi, Texas. Its asset utilization has ramped up over the past two years, and year to date, the company has operated near full capacity. The incremental transport volumes from its ongoing expansion project will further support its cash flow,” S&P said in a press release.

The agency said it expects Y-Grade’s S&P Global Ratings-adjusted debt to EBITDA will deleverage to the high-5x to low-6x range over the next two years.

The company plans to convert $56.5 million of its BeachPoint term loan due March 2025 into $63.95 million of its term loan B due June 2027. The agency said, “In our view, the existing investors are receiving adequate compensation for the longer tenor. At close, the company will have approximately $990 million of TLB outstanding.”

The outlook is stable.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.