A Hess Midstream subsidiary intends to offer $500 million in aggregate principal senior unsecured notes, due 2029, in a private offering, the company said on May 8.
Subsidiary Hess Midstream Operations LP (HESM OpCo) will offer the notes. Hess Midstream said it intends to use the net proceeds from the offering to reduce outstanding debt under its revolving credit facility, with any remaining proceeds to be used for general corporate purposes.
The notes are being sold only to persons reasonably believed to be “qualified institutional buyers” in the U.S. pursuant to Rule 144A and outside the U.S. to non-U.S. persons in compliance with Regulation S under the Securities Act of 1933.
The notes have not been and will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the U.S. absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws.
In a May 8 report, Fitch Ratings assigned a BB+'/'RR4 rating to the subsidiary’s proposed unsecured notes.
“The proposed new issuance is not expected to have a meaningful impact on HESM OpCo's leverage and credit profile. Fitch has reviewed preliminary terms of the issuance, and the assigned ratings assume no material variations in the final terms,” Fitch said.
HESM OpCo's ratings continue to reflect Fitch's expectations of leverage to be slightly above 3.0x, given the trends in debt-funded share buybacks.
“The ratings are further bolstered by HESM OpCo's strong cash flow profile. Risks associated with single-basin focused midstream service providers with high customer concentration remains causes of concern,” Fitch said.
Recommended Reading
Kissler: Mideast Tension Elevates Crude Prices—But for How Long?
2024-05-09 - Producers should be aggressive in locking in desirable crude oil prices on an abnormal market strength.
What's Affecting Oil Prices This Week? (March 18, 2024)
2024-03-18 - On average, Stratas Advisors predicts that supply will be at a deficit of 840,000 bbl/d during 2024.
What's Affecting Oil Prices This Week? (March 11, 2024)
2024-03-11 - Stratas Advisors expects oil prices to move higher in the middle of the year, but for the upcoming week, there is no impetus for prices to raise.
Baltimore Port Closure Could Dent US Coal Export Volumes, EIA Says
2024-03-28 - Baltimore handled exports of 28 million short tons last year, making up 28% of total U.S. coal exports.
CERAWeek: Trinidad Energy Minister on LNG Restructuring, Venezuelan Gas Supply
2024-03-28 - Stuart Young, Trinidad and Tobago’s Minister of Energy, discussed with Hart Energy at CERAWeek by S&P Global, the restructuring of Atlantic LNG, the geopolitical noise around inking deals with U.S.-sanctioned Venezuela and plans to source gas from Venezuela and Suriname.