S&P gives AL GCX, loan B+

S&P said it gave B+ ratings to AL GCX Holdings LLC and its planned $630 million senior secured term loan due 2029. The 3 recovery rating on the term loan indicates meaningful (50%-70%; rounded estimate: 50%) recovery in default.

AL GCX Holdings is a subsidiary of Arclight Capital Partners LLC that holds a 25% non-controlling equity interest in Gulf Coast Express (GCX) Pipeline LLC. The issuer will use the proceeds to finance the acquisition of its interest in GCX.

“AL GCX relies solely on distributions from GCX Pipeline to service its term loan due 2029 because it does not have any other substantive assets. Therefore, we rate AL GCX under our noncontrolling equity interest (NCEI) criteria. As such, our view of AL GCX's credit profile incorporates its financial ratios, GCX Pipelines' cash flow stability, the company's ability to influence GCX Pipeline's financial policy, and its ability to liquidate its investment in GCX Pipeline to repay its $630 million senior secured term loan,” S&P said in a press release.

The outlook is stable.

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