S&P ups Howard Midstream Energy

S&P said it raised Howard Midstream Energy Partners LLC’s issuer rating to BB- from B+ and its senior unsecured notes to B+ from B, The 5 (20%) recovery rating is unchanged.

Howard converted its $430 million of series B preferred units into common equity on Dec. 30.

“We previously treated these securities as 100% debt in our assessment of the company's financial measures. With the conversion, credit ratios materially improved,” S&P said in a press release. The conversion will also save the issuer $42 million in yearly preferred dividends.

“We now forecast adjusted debt to EBITDA of 3.5x-4x in 2023, improving to 3.5x in 2024, compared with our previous expectation of 5.5x-6x in 2023 and 5x-5.5x in 2024,” the agency said.

The outlook is stable.

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