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S&P rates DT Midstream BB+, loan BBB-
S&P assigned its BB+ long-term issuer credit rating to DT Midstream Inc. and its BBB- issue-level rating and 1 recovery rating to the company's senior secured term loan.
The company is issuing a $1 billion senior secured term loan due 2028.
The outlook is stable.
Proceeds from the loan will be used to pay down a portion of short-term borrowing.
It is being spun off from DTE Energy Co. (BBB+/Stable/A-2) and will be a fully independent company once the spin-off is completed.
The stable outlook reflects the expectation that DT Midstream will maintain its long-term leverage below 4x on a sustained basis, improving gradually to about 3.8x in 2023 from about 4.1x in 2021 as the company pays down debt with excess cash flows.
The company is also expected to launch a senior unsecured note offering in the coming weeks.
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