S&P rates Tesoro Logistics notes BB+

S&P said it assigned its BB+ issue-level rating and 3 recovery rating to Tesoro Logistics LP’s and Tesoro Logistics Finance Corp.'s proposed $750 million senior unsecured notes due 2025.

The recovery rating of 3 indicates an expectation of meaningful (50% to 70%; higher end of the range) recovery if a payment default occurs.

The partnership intends to use gross proceeds to repay amounts outstanding under its $1 billion dropdown credit facility, which were used to fund a portion of consideration for the Alaska storage and terminalling asset acquisition and a portion of the consideration for the Northern California terminalling and storage asset purchase.

Tesoro’s corporate credit rating is BB+ and the outlook is stable.

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