Moody’s rates Hess Ba2, notes Ba3, facility Baa3

Moody's Investors Service said it assigned Hess Infrastructure Partners LP (HIP) a Ba2 corporate family rating, a Ba3 senior unsecured notes rating, a Ba2-PD probability of default rating and a Baa3 senior secured facility rating.

The outlook is stable.

The notes will be the beneficiary of upstream guarantees from wholly owned domestic subsidiaries.

Net proceeds will be largely used to refinance existing debt.

The notes are being co-issued by Hess Infrastructure Partners Finance Corp.

HIP is a 50/50 joint venture between Hess Corp. (HES, Ba1 stable) and Global Infrastructure Partners, Moody’s explained. HIP owns an 80% economic interest in various midstream assets operating in the Bakken and Three Forks Shale formations (the Bakken). The remaining 20% interest in these assets is held by the master limited partnership (MLP) Hess Midstream Partners LP (HESM, not rated) in which HIP holds the 2% general partnership interest and 100% of the Incentive Distribution Rights (IDRs).

"HIP's Ba2 CFR reflects the strong contractual relationship it has with Hess and the integrated midstream services it owns and operates in support of Hess's production and ongoing development of its Bakken and Three Forks crude oil production activities, the single largest concentrated source of Hess's consolidated crude oil production," Moody's vice president Andrew Brooks said in a news release.

"While there is organizational complexity to the HIP/HESM relationship, corporate governance as it relates to the management and control of the two entities is seemingly well aligned."

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