Moody’s rates Centurion Pipeline loans Ba3

Moody's Investors Service said it assigned ratings to Centurion Pipeline Co. LLC, including a Ba3 corporate family rating, a Ba3-PD probability of default rating, a Ba3 rating to its proposed $350 million senior secured term loan and a Ba3 rating to its $100 million senior secured revolving credit facility.

The outlook is stable.

The proceeds from the term loan issuance, along with equity contribution from private equity sponsor EnCap Flatrock Midstream, will fund the recently agreed acquisition of the Centurion pipeline system and a Southeast New Mexico crude oil gathering system from Occidental Petroleum Corp. (A3 stable).

“Centurion benefits from its well-connected midstream assets in the Permian basin that should offer opportunities to grow the business and add to the existing revenue commitments from several key customers,” Elena Nadtotchi, vice president and senior credit officer at Moody's, said in a news release.

“Solid existing operating cash flows and sizable equity funding by the new sponsor keep Centurion's initial leverage low and boosts its financial capacity to support such future growth.”

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