S&P views TortoiseEcofin negatively

S&P Global Ratings said it revised its outlook on TortoiseEcofin Parent Holdco LLC to negative from stable and affirmed the CCC+ issuer credit rating and CCC senior secured debt rating. The recovery rating on the company's debt is unchanged at 5, indicating a modest (25%) recovery in default.

“The outlook revision reflects Tortoise's lower interest coverage. Specifically, we now expect coverage, as measured by interest to adjusted EBITDA, to be below 1x over the next 12 months. With about $297 million on the term loan due in January 2025 and our estimates of annual EBITDA of $14 million to $16 million, we believe leverage will be 20x–22x over the next 12 months,” S&P said in a press release.

Despite the pain from higher interest rates, the agency noted Tortoise’s assets under management grew to $8.8 billion as of the third quarter of 2022 from $8.5 billion at Dec. 31.

“We expect energy markets to continue to perform well in 2023. That said, Tortoise saw continued net outflows in its energy and power infrastructure strategies year-to-date 2022,” S&P said.

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