Research Update: GIP II Blue Holding L.P. 'BB-' Issuer Credit Rating Affirmed; Outlook Stable

GIP II Blue Holding L.P.'s (HoldCo) recently sold approximately 12.7 million Class A shares in Hess Midstream L.P. (HESM) for approximately $444 million and completed a voluntary prepayment of its term loan B for approximately $130 million. At close, HoldCo's ownership in HESM decreased to approximately 14.9%. We affirmed our 'BB-' issuer credit rating on HoldCo and our 'BB-' issue-level rating on its senior secured term loan B. The '3' recovery rating indicates our expectation of meaningful (50%-70%; rounded estimate: 65%) recovery in the event of a payment default. The stable outlook on HoldCo reflects our expectation that HESM will continue to increase its distributions at least 5% annually, and HoldCo will maintain S&P Global Ratings-adjusted debt to EBITDA of

...- GIP II Blue Holding L.P.'s (HoldCo) recently sold approximately 12.7 million Class A shares in Hess Midstream L.P. (HESM) for approximately $444 million and completed a voluntary prepayment of its term loan B for approximately $130 million. At close, HoldCo's ownership in HESM decreased to approximately 14.9%. - We affirmed our '##-' issuer credit rating on HoldCo and our '##-' issue-level rating on its senior secured term loan B. The '3' recovery rating indicates our expectation of meaningful (50%-70%; rounded estimate: 65%) recovery in the event of a payment default. - The stable outlook on HoldCo reflects our expectation that HESM will continue to increase its distributions at least 5% annually, and HoldCo will maintain S&P Global Ratings-adjusted debt to EBITDA of 2.5x-3.5x and S&P Global Ratings-adjusted EBITDA interest coverage ratio of 2.9x-4.0x through 2025....

Research Update