Moody's assigns Archrock notes B2

Moody's Investors Service said it assigned a B2 rating to Archrock Partners, LP's proposed $250 million of senior unsecured notes issue due 2028. The notes are being co-issued by Archrock Partners Finance Corp., a wholly-owned subsidiary of Archrock.

“The proposed senior notes are rated B2, one notch below the company's B1 CFR. The notes are guaranteed by Archrock's parent, Archrock, Inc. (AROC), which also guarantees the company's revolving credit facility and its senior unsecured notes due 2027. Both of Archrock's senior notes issues have subsidiary guarantees, and all notes are junior to the claim of the relatively large $1.25 billion asset-based revolving credit facility. The large revolver places downward pressure on the notes' rating. However, given revolver paydown from the proposed issuance and our expectation that Archrock will generate significant free cash flow in 2021 which will likely lead to additional revolver repayment, the one-notch separation between the notes and the CFR remains warranted,” Moody’s said in a press release.

Proceeds will be used to repay borrowings under the company's revolving credit facility and general corporate purposes.

None of Archrock's other ratings, including its B1 corporate family rating, are affected by the note issuance, the agency said.

The outlook is stable.

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