S&P rates Freeport loans B+

S&P said it assigned B+ issue and 2 recovery ratings to the $2.3 billion in senior secured term loans that Freeport LNG Investments LLLP and guarantor Flngi Option Holdco LLC, collectively Flngi, will issue. The 2 recovery rating indicates an expectation that lenders will receive substantial (70%-90%; rounded estimate: 70%) recovery in the event of a payment default. The agency also gave a B issuer rating to Flngi.

“Our B issuer credit rating on Flngi reflects a three-notch downward revision from our BB issuer credit rating on FLEX-IH. The downward revision reflects Flngi's structural subordination, sole reliance on upstream distributions from FLEX-IH to service its financial obligations, the underlying cash flow stability of the distributions it receives from FLEX-IH, and Flngi's stand-alone leverage,” S&P said in a press release.

The company plans to use the proceeds to refinance the debt of $2.2 billion and fund related fees and expenses and a debt service reserve of $89 million.

The outlook is stable.

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