Fitch cuts TransMontaigne, rates loans BB

Fitch Ratings said it cut TransMontaigne Partners LLC's long-term issuer default rating to B+ from BB and the senior unsecured notes to B-/RR6 from BB/RR4. The agency also assigned a B+ IDR to TransMontaigne Operating Co. LP (TLP or OpCo) and BB/RR2 ratings to the planned $1 billion senior secured term loan and $150 million revolver.

TransMontaigne will use the new term loan to repay debt at SeaPort Financing LLC, reduce TLP revolver borrowings to nil, partially repay the debt at TLP Finance Holdings LLC (Holdings; an entity above Partners) and fund a distribution to the private equity sponsor, Arclight, as compensation for the contribution of SeaPort.

“The downgrade reflects elevated leverage expected following an announced transaction. The ratings reflect the business and financial profile pro forma for the transaction. Leverage at Partners (which consolidates OpCo) is forecast to rise to nearly 6.5x by YE 2022, well above the prior 4.8x negative leverage sensitivity,” Fitch said in a press release.

The outlook for Partners and TLP is stable.

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