Research Update: Summit Midstream Partners L.P. 'B' Rating Affirmed On Acquisitions; Outlook Stable; 'BB-' Debt Rating Affirmed

Summit Midstream Partners L.P. (SMLP) announced that it intends to acquire Sterling Investment Holdings LLC and Outrigger Energy II LLC for a total purchase price of $305 million. The transaction will be partially funded through the issuance of an $85 million add-on to the existing senior secured second-priority notes due in 2026. We view the acquiring assets are in line with SMLP's core businesses and expect SMLP's financial measures will remain above 7x in 2022 before improving to the low-5x area in 2023. We expect the transaction to close later this year. As a result, we affirmed our 'B' issuer credit rating on SMLP and our 'BB-' issue-level rating and '1' recovery rating on Summit Midstream Holdings LLC and Summit

...- Summit Midstream Partners L.P. (SMLP) announced that it intends to acquire Sterling Investment Holdings LLC and Outrigger Energy II LLC for a total purchase price of $305 million. The transaction will be partially funded through the issuance of an $85 million add-on to the existing senior secured second-priority notes due in 2026. We view the acquiring assets are in line with SMLP's core businesses and expect SMLP's financial measures will remain above 7x in 2022 before improving to the low-5x area in 2023. We expect the transaction to close later this year. - As a result, we affirmed our 'B' issuer credit rating on SMLP and our '##-' issue-level rating and '1' recovery rating on Summit Midstream Holdings LLC and Summit Midstream Finance Corp.'s second-priority senior secured notes pro forma for the add-on. - At the same time, we affirmed our 'B-' issue-level rating and '5' recovery rating on SMLP's senior unsecured notes. Our 'D' issue-level rating on SMLP's preferred stock remains unchanged...

Research Update