Fitch rates Kodiak Gas, notes BB

Fitch Ratings said it assigned BB ratings to Kodiak Gas Services, LLC and its planned senior unsecured notes. The recovery rating is RR4.

The outlook is stable.

“Kodiak's rating reflects stable cash flows supported by fixed-fee, take-or-pay-type contracts, relatively low leverage and customer diversification, with some geographic concentration within the Permian Basin. The company's weighted average remaining contract life is relatively short compared with higher-rated midstream issuers; however, Fitch recognizes Kodiak has long-standing customer relationships,” the agency said in a statement.

The outlook mirrors a forecast “for continued high utilization rates on Kodiak's assets, driven by the company's rigorous and systematic fleet maintenance practices, as well as strong expected demand for the company's services,” the agency said.

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