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S&P raises Medallion Gathering
S&P said it raised its ratings for Medallion Gathering & Processing LLC and its $724 million outstanding senior secured term loan to B from B-. The recovery rating on the company's debt remains 3, which indicates meaningful (50%-70%; rounded estimate: 65%) recovery in default.
“Our B issuer credit rating reflects Medallion's proactive extension of the maturity date on its revolving credit facility to April 2024 from October 2022, which removes the near-term debt refinancing risk. We anticipate the improvement in commodity prices will result in production growth in Medallion's dedicated acreage. This, combined with the lack of material expansion projects, will lead to strong discretionary cash flow the company could use to reduce its leverage,” S&P said in a press release.
The agency said it forecasts Medallion’s S&P Global Ratings-adjusted debt to EBITDA at about 5x in 2021, declining to 4.5x-4.7x in 2022.
The outlook is stable.
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