Fitch assigns Vistra notes BBB-

Fitch Ratings said it assigned a BBB-/RR1 rating to Vistra Operations Co. LLC’s proposed senior secured notes due 2027. Vistra Operations also is issuing an add-on offering to its 3.55% $1.2 billion senior secured notes due 2024, which Fitch also rates BBB-/RR1. The RR1 recovery rating denotes outstanding recovery in the event of default.

Vistra Operations plans to use the proceeds from the two offerings along with cash on hand and a tack-on senior secured term loan B-3 offering to prepay the $1.897 billion of senior secured terms loans B-1 due 2023. Also, Vistra is planning to roll remaining B-1 term loans into the B-3 tranche and reprice this tranche, Fitch said.

The new senior secured notes will be pari passu with its first-lien debt. The first-lien secured debt at Vistra Operations receives an upstream guarantee from the asset subsidiaries under Vistra Operations, which consists of a substantial portion of property, assets and rights owned by Vistra Operations, as well as a downstream guarantee from Vistra Intermediate Company LLC, a direct subsidiary of Vistra Energy, Fitch said.

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