Moody's rates Lower Cadence loan B2

Moody's Investors Service said it assigned first-time ratings to Lower Cadence Holdings LLC (Oryx), including a B2 corporate family rating, a B2-PD probability of default rating and a B2 (LGD 4) senior secured term loan rating.

The outlook is stable.

Stonepeak Cadence Holdings, LLC, an affiliate of Stonepeak Infrastructure Partners, will be acquiring all subsidiaries of Oryx Southern Delaware Holdings, LLC (Oryx I) and Oryx Delaware Holdings, LLC (Oryx II).

The transaction will consolidate Oryx I and Oryx II into a single borrower and the purchase will be partially funded through the proceeds of the proposed $1.5 billion senior secured term loan.

When the transaction closes, the existing Oryx I's $800 million senior secured term loan and the $80 million super priority revolver will be refinanced, Moody's explained.

Moody's said it will withdraw the existing ratings of Oryx I, including its B2 corporate family rating, upon the closing of the proposed acquisition.

Combining Oryx I and Oryx II into one entity reduces the structural complexity as Oryx I was operationally reliant on an affiliated, the agency explained, but external entity Oryx II.

The ratings reflect the company's high financial leverage and increased scale from the combination of Oryx I and Oryx II, Moody's said, along with its geographic concentration.

The ratings benefit from 100% fixed-fee acreage dedication contracts with customers that have aggressive volume growth plans, the agency said.

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