Moodys.com
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

 

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

 

Terms of One-Time Website Use

 

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

 

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

 

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

 

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

 

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Rating Action:

Moody's affirms EnLink's Ba1 CFR; downgrades GIP III Stetson I's CFR to B1

12 Feb 2020

New York, February 12, 2020 -- Moody's Investors Service (Moody's) affirmed EnLink Midstream, LLC's (ENLC) Ba1 Corporate Family Rating (CFR), Ba1-PD Probability of Default Rating (PDR) and Ba1 senior unsecured notes rating. ENLC's Speculative Grade Liquidity (SGL) Rating was upgraded to SGL-2 from SGL-3. ENLC's rating outlook is stable.

Moody's also affirmed ENLC's subsidiary, EnLink Midstream Partners, LP's (ENLK, and collectively with ENLC, EnLink) Ba1 senior unsecured notes rating and Ba3 perpetual preferred units rating. ENLK's rating outlook is stable.

Concurrently, Moody's downgraded GIP III Stetson I, L.P.'s (GIP III Stetson I) CFR to B1 from Ba3, PDR to B1-PD from Ba3-PD and the senior secured term loan rating to B1 from Ba3. The term loan borrowers are GIP III Stetson I and GIP III Stetson II, L.P. (GIP III Stetson II, and collectively with GIP III Stetson I, GIP III Stetson). The borrowers are jointly and severally liable with respect to the term loan. The rating outlook is stable.

"GIP III Stetson's downgrade reflects its high stand-alone leverage and reduced cash flow pro forma for EnLink's distribution cut," said Amol Joshi, Moody's Vice President and Senior Credit Officer.

Downgrades:

..Issuer: GIP III Stetson I, L.P.

.... Probability of Default Rating, Downgraded to B1-PD from Ba3-PD

.... Corporate Family Rating, Downgraded to B1 from Ba3

....Senior Secured Term Loan, Downgraded to B1 (LGD4) from Ba3 (LGD4)

Affirmations:

..Issuer: EnLink Midstream, LLC

.... Probability of Default Rating, Affirmed Ba1-PD

.... Corporate Family Rating, Affirmed Ba1

....Senior Unsecured Shelf, Affirmed (P)Ba1

....Senior Unsecured Notes, Affirmed Ba1 (LGD4)

..Issuer: EnLink Midstream Partners, LP

....Perpetual Preferred Units, Affirmed Ba3 (LGD6)

....Senior Unsecured Notes, Affirmed Ba1 (LGD4)

Upgrades:

..Issuer: EnLink Midstream, LLC

.... Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3

Outlook Actions:

..Issuer: GIP III Stetson I, L.P.

....Outlook, Remains Stable

..Issuer: EnLink Midstream, LLC

....Outlook, Remains Stable

..Issuer: EnLink Midstream Partners, LP

....Outlook, Remains Stable

RATINGS RATIONALE

ENLC's Ba1 CFR reflects its high proportion of fee-based revenue with cash flow visibility, but subject to increased volume risk. In January 2020, ENLC announced a significant unit distribution cut, boosting its distribution coverage while striving to self-fund its 2020 capital spending needs. Good distribution coverage implies that EnLink will retain a higher proportion of cash flow, alleviating the pressure of seeking third party debt and dilutive equity to finance capital spending. EnLink also has a diversified asset base, but growing cash flow in 2020-21 will be challenging. The company has a large exposure to the STACK, where it faces volume risk due to a substantial reduction in 2020 drilling activity by Devon Energy Corporation (Devon, Ba1 positive), its largest counterparty. EnLink also has significant exposure to the mature Barnett Shale, where volumes have been declining. EnLink will need to offset this volume and cash flow decline through capital intensive growth in other regions such as the Permian, which entails execution risk. EnLink's 2020 capital spending will largely be focused in the Permian Basin, followed by spending to enhance its Louisiana assets. EnLink receives significant revenue from Devon, and EnLink's rating reflects the company's sizable customer concentration risk with Devon.

ENLC's SGL-2 rating reflects good liquidity, and EnLink should generate modest positive free cash flow in 2020 supported by its significant distribution cut and reduced capital spending. The company is striving to self-fund its capital expenditures and reduce reliance on the capital markets. ENLC has a $1.75 billion revolving credit facility, which is guaranteed by ENLK and matures in January 2024. At September 30, the company had about $102 million of cash and $275 million outstanding under its credit facility. The revolver has two material financial covenants, a maximum consolidated leverage ratio of 5x (relaxed to 5.5x for the quarter of an acquisition and the following three quarters) and a minimum consolidated interest coverage ratio of 2.5x. Moody's expects the company to remain in covenant compliance into 2021. EnLink's nearest significant maturity is its $850 million unsecured term loan maturing in December 2021. The term loan contains substantially the same covenants as the revolving credit facility.

While the distribution cut was supportive to ENLC's rating, this has meaningfully reduced the cash flow received by GIP III Stetson I, resulting in the downgrade of its CFR to B1 from Ba3. GIP III Stetson I's B1 CFR reflects its structural subordination to the debt at EnLink, the company's standing as a pure-play entity without any hard assets, and its high stand-alone financial leverage. GIP III Stetson acquired Devon's controlling interests in the EnLink companies in July 2018. GIP III Stetson owns 100% interest in EnLink Midstream Manager (EMM, unrated) and about 40% equity interest in ENLC pro forma for ENLK's Series B preferred dilution. GIP III Stetson's ability to service its debt is solely reliant on distributions from EnLink, a distribution stream which is junior to EnLink's substantial financing and operating requirements. GIP III Stetson's leverage on a stand-alone basis pro forma for its reduced cash flow due to EnLink's distribution cut is high, around 5x Debt/EBITDA. However, leverage should gradually improve, driven by mandatory payments from the term loan's excess cash flow sweep feature. GIP III Stetson could also sell ENLC units but could be required to use part of the disposition proceeds to prepay a portion of the term loan subject to certain leverage ratio thresholds.

The B1 rating on the senior secured term loan is in line with GIP III Stetson I's CFR, reflecting the term loan's first priority claim on the ownership interests in EMM and ENLC and it being the only debt outstanding at the company.

GIP III Stetson should have adequate liquidity, however, GIP III Stetson's cash flows will weaken following EnLink's distribution cut. With limited administrative overhead, GIP III Stetson does not have significant liquidity needs and it should receive sufficient distributions from EnLink to still comfortably cover interest expense. The financial maintenance covenant is a minimum debt service coverage ratio of 1.1x. There is a 1% mandatory amortization of the term loan per annum and 75% excess cash flow recapture when stand-alone leverage is above 5x, but stepping down to 50% when standalone leverage is equal to or less than 5x and 0% when standalone leverage is equal to or less than 2.5x. The alternate sources of liquidity are limited given that its ownership interests secure the term loan. However, GIP III Stetson has the ability to sell ENLC units subject to certain restrictions.

ENLC's and ENLK's outlooks are stable reflecting good liquidity and distribution coverage. EnLink's rating could be upgraded if the company achieves debt/EBITDA below 4x and consolidated leverage (inclusive of GIP III Stetson debt) below 4.5x, while maintaining strong distribution coverage. For an upgrade, EnLink should also successfully grow cash flow to more than offset expected decline within its mature assets. Ratings would likely be downgraded if debt/EBITDA increases to exceed 5x, or consolidated leverage (inclusive of GIP III Stetson debt) exceeds 5.5x, or distribution coverage significantly deteriorates. Additional debt at GIP III Stetson would pressure EnLink's rating.

GIP III Stetson I's rating outlook is stable, reflecting Moody's expectation for financial leverage to gradually improve from high levels. An upgrade could be considered if EnLink's rating is upgraded or stand-alone GIP III Stetson leverage falls below 4x. A downgrade would occur if EnLink is downgraded, if distributions received from EnLink decline further, or stand-alone EBITDA to interest expense falls below 2.5x.

The principal methodology used in these ratings was Midstream Energy published in December 2018. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

EnLink Midstream, LLC is a publicly traded company engaged in midstream energy services through its subsidiary EnLink Midstream Partners, LP, including the gathering, processing, fractionation, transportation and marketing of natural gas, natural gas liquids and crude oil in several US regions, including in the STACK, Cana and Arkoma Woodford Shales, Barnett Shale, Permian Basin and Louisiana.

GIP III Stetson owns controlling interests in the EnLink companies.

REGULATORY DISCLOSURES

For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Amol Joshi, CFA
VP-Sr Credit Officer
Corporate Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Steven Wood
MD - Corporate Finance
Corporate Finance Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

No Related Data.
© 2020 Moody's Corporation, Moody's Investors Service, Inc., Moody's Analytics, Inc. and/or their licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND/OR ITS CREDIT RATINGS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY'S (COLLECTIVELY, "PUBLICATIONS") MAY INCLUDE SUCH  CURRENT OPINIONS. MOODY'S INVESTORS SERVICE DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY'S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY'S INVESTORS SERVICE CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS ("ASSESSMENTS"), AND  OTHER OPINIONS INCLUDED IN MOODY'S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY'S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY'S ANALYTICS, INC. AND/OR ITS AFFILIATES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND  PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND  PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES  ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR  PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT.

MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing its Publications.

To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY'S.

To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER.

Moody's Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody's Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moody's Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and Moody's investors Service also maintain policies and procedures to address the independence of Moody's Investors Service credit ratings and credit rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moody's Investors Service and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading "Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy."

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY'S affiliate, Moody's Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody's Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to "wholesale clients" within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY'S that you are, or are accessing the document as a representative of, a "wholesale client" and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to "retail clients" within the meaning of section 761G of the Corporations Act 2001. MOODY'S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. ("MJKK") is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody's Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody's SF Japan K.K. ("MSFJ") is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization ("NRSRO"). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​​​​​​​​
Moodys.com