S&P rates Blackstone CQP loan, notes B

S&P said it gave B ratings with 3 recovery ratings to Blackstone CQP Holdco LP’s planned $2.9 billion term loan due 2028 and $1 billion of secured notes due 2031. Concurrently, the agency revised Blackstone’s outlook to stable from positive and affirmed the B issuer rating.

“The proposed refinancing constitutes a $1.3 billion increase to BXCQP's debt and will therefore increase leverage. The company's proposed $2.9 billion senior secured term loan and $1 billion senior secured notes, which are pari passu, will be used to refinance the existing $2.6 billion term loan,” the agency said in a press release. Blackstone will use the remaining proceeds to refinance debt at affiliates.

S&P said it sees Blackstone getting distributions from its partly owned Cheniere Energy Partners (CQP) of $530 million to $560 million in 2021 and next year versus its previous forecast of $515 million to $530 million.

“The increased EBITDA is due to additional CQP units pledged to BXCQP at the close of the refinancing. Despite the improvement to our distribution assumptions, the higher debt balance results in expected debt to EBITDA in the high-6x to low-7x area for 2021 and 2022. As Train 6 comes online in 2022, we expect distributions will increase, resulting in debt to EBITDA to fall below 5x in 2023. Our revision of the outlook to stable stemmed from the elevated leverage through 2022,” the agency said.

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