Fitch gives Targa Resources BB+

Fitch Ratings said it gave a first time long-term issuer default rating of BB+ to Targa Resources Partners LP (TRP) and parent Targa Resources Corp. (TRC). Fitch also assigned BBB-/RR1 (recovery of 91%-100%) ratings to TRP's $2.2B secured revolver due 2023 and BB+/RR4 (recovery of 31%-50%) ratings to the unsecured notes. BB-/RR6 (recovery of 0%-10%) ratings were also assigned to TRC's $670 million secured revolver.

“The rating reflects Targa's integrated natural gas liquids (NGL) footprint, exposure to the Permian Basin and the higher credit quality and diverse customer base. Offsetting these factors are the volumetric risks and higher commodity risk than other midstream peers, though somewhat mitigated by the incorporation of fixed-fee and fee floors in the gathering and processing (G&P) contracts and a ratable hedging policy,” Fitch said in a press release.

The outlook is stable.

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