Moody's rates GIP II Blue loan B1

Moody's Investors Service said it assigned first-time ratings to GIP II Blue Holding, LP (HESM Holdco), including a B1 corporate family rating and a B1 rating to its planned $750 million senior secured term loan.

HESM Holdco is a newly formed subsidiary of sponsor Global Infrastructure Partners and intends to issue a $750 million senior secured term loan backed by its equity ownership interests in Hess Midstream LP (HESM, unrated) and its operating subsidiary, Hess Midstream Operations LP (HESM Opco, Ba2 stable). The proceeds will be used to fund a distribution to the sponsor.

"HESM Holdco's B1 rating reflects its structural subordination to debt at HESM Opco and its complete reliance on distributions from Hess Midstream to cover its debt-service obligations," commented Pete Speer, a Moody's senior vice president, in a press release. "The rating is supported by HESM Opco's stable and rising cash flow underpinned by long-term contracts and GIP's substantial ownership stake and strong contractual rights to participate in key governance decisions for Hess Midstream."

The outlook is stable.

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