S&P rates Gray Oak Pipeline, notes BBB

S&P said it assigned BBB ratings to Gray Oak Pipeline LLC and its planned offering of up to $1.4 billion of senior unsecured notes to be sold in multiple tranches.

“The rating reflects our view that Gray Oak has highly predictable cash flows. We expect long-term take-or-pay commitments of seven years to support cash flow. The take-or-pay commitments are for approximately 800,000 bpd. In addition, we rate the majority of shippers in the investment-grade category,” S&P said in a press release.

The company plans to use the proceeds to refinance its $1.38 billion term loan bank facility due 2022.

The outlook is stable. “The stable outlook on Gray Oak reflects our expectation that the company will maintain relatively stable operations supported by long-term take-or-pay commitments of about 800 mbpd, representing about 80% of total pipeline capacity,” S&P said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.