S&P rates GIP Stetson loans B+

S&P said it assigned a B+ corporate credit rating to GIP III Stetson I LP and GIP III Stetson II LP (collectively GIP Stetson), the entities that will own the general partner interest of master limited partnership, EnLink Midstream Partners LP upon closing the transaction.

The outlook is stable.

At the same time, S&P said it assigned a B+ issue-level rating and 4 recovery rating to the companies' $1 billion term loan B due 2025. The 4 recovery rating indicates an expectation that lenders will receive average (30%-50%; rounded estimate: 45%) recovery in the event of a payment default.

On June 6, Oklahoma-based oil and gas exploration and production company Devon Energy Corp. announced that it will divest its entire stake in EnLink Midstream Partners (currently owns 23%) and EnLink Midstream LLC (currently owns 64%) to an affiliate of Global Infrastructure Partners Inc. (GIP) for $3.125 billion in cash. GIP Stetson will assume Devon's interest in the two entities following the close of the transaction

“Our B+ corporate credit rating on GIP Stetson reflects a three-notch downward revision from our BB+ corporate credit rating on master limited partnership (MLP) EnLink. The downward revision reflects its sole reliance on upstream distributions from EnLink and ENLC to service its financial obligations, the underlying cash flow stability of the distributions it receives from EnLink, and GIP Stetson's stand-alone leverage,” S&P said in a news release.

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