S&P rates Harvest Midstream I B+, notes BB-

S&P said it assigned Harvest Midstream I LP a B+ issuer rating and a BB- rating with a 2 recovery rating to its planned $600 million of senior unsecured notes due 2028. The 2 recovery rating indicates S&P’s expectation for substantial(70%-90%; rounded estimate: 70%) recovery in the event of a default.

The agency said it expects the partnership to use the proceeds to repay a portion of the outstanding borrowings on the unrated revolving credit facility and to repay the unrated term loan A balance fully.

The outlook is stable. The outlook mirrors the agency’s view the partnership will close the acquisition of the British Petroleum Alaska midstream assets by the end of third-quarter 2020. “We expect the partnership to maintain adequate liquidity levels throughout this process and achieve adjusted debt to EBTIDA of 4x-4.5x in 2020,” S&P said in a press release.

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