Research Update: GIP II Blue Holding L.P. 'BB-' Ratings Affirmed On Debt Prepayment; Outlook Stable

This month, GIP II Blue Holding L.P. (HoldCo) participated in the public offering of Hess Midstream L.P. (HESM) class A shares. HoldCo received $346 million and used a portion of the proceeds to prepay $73 million on its term loan, improving its debt ratio. As a result, we affirmed our 'BB-' issuer credit rating on GIP II and our 'BB-' issue-level rating and '3' recovery rating on the company's $750 million senior secured term loan B. The '3' recovery rating indicates our expectation of meaningful (50%-70%; rounded estimate: 60%) recovery in the event of a payment default. The outlook is stable. The stable outlook reflects our expectation that HESM will increase its distributions at least 5% annually, which will lead

...This month, GIP II Blue Holding L.P. (HoldCo) participated in the public offering of Hess Midstream L.P. (HESM) class A shares. HoldCo received $346 million and used a portion of the proceeds to prepay $73 million on its term loan, improving its debt ratio. As a result, we affirmed our '##-' issuer credit rating on GIP II and our '##-' issue-level rating and '3' recovery rating on the company's $750 million senior secured term loan B. The '3' recovery rating indicates our expectation of meaningful (50%-70%; rounded estimate: 60%) recovery in the event of a payment default. The outlook is stable. The stable outlook reflects our expectation that HESM will increase its distributions at least 5% annually, which will lead HoldCo to sustain a leverage ratio between 3x and 3.25x and an EBITDA interest coverage ratio above 5x in 2022....

Research Update