Research Update: GIP II Blue Holding L.P. Assigned 'BB-' ICR, Outlook Stable; Senior Secured Term Loan Rated 'BB-' (Recovery Rating: '3')

GIP II Blue Holding L.P. (HESM HoldCo) is a subsidiary of Global Infrastructure Partners (GIP) that owns an approximately 45% effective interest in Hess Midstream Operations L.P. (HESM) and its subsidiaries. HESM HoldCo is issuing a $750 million senior secured term loan B due 2028, which it will use the net proceeds from to fund a distribution to its sponsor, GIP. We assigned our 'BB-' issuer credit rating to GIP II Blue Holding L.P. and our 'BB-' issue-level rating and '3' recovery rating to its senior secured term loan B. The '3' recovery rating indicates our expectation of meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a payment default. The stable outlook reflects our expectation that HESM will

...- GIP II Blue Holding L.P. (HESM HoldCo) is a subsidiary of Global Infrastructure Partners (GIP) that owns an approximately 45% effective interest in Hess Midstream Operations L.P. (HESM) and its subsidiaries. HESM HoldCo is issuing a $750 million senior secured term loan B due 2028, which it will use the net proceeds from to fund a distribution to its sponsor, GIP. - We assigned our '##-' issuer credit rating to GIP II Blue Holding L.P. and our '##-' issue-level rating and '3' recovery rating to its senior secured term loan B. The '3' recovery rating indicates our expectation of meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a payment default. - The stable outlook reflects our expectation that HESM will increase its distributions by at least 5% annually, which will lead HESM HoldCo to sustain a leverage ratio of 3x and an EBITDA interest coverage ratio above 6x in 2022....

Research Update