Moody's assigns M6 Midstream, loan B1

Moody's Investors Service said it assigned first-time ratings to M6 ETX Holdings II MidCo LLC (M6 Midstream), including a B1 corporate family rating, a B1-PD probability of default rating and a B1 rating to its planned $600 million seven-year senior secured term loan.

The company also plans to secure a $75 million revolver due 2027 that will have a super-senior first-out priority claim to the company's assets over the term loan.

"M6 Midstream generates a stable revenue stream from a diverse group of customers, with close to 80% of revenue under fixed-fee contracts, providing a degree of certainty to cash flow available for debt service," said Thomas Le Guay, a Moody's assistant vice president, in a press release.

"Moreover, strong revenue growth and modest capital spending should allow the company to rapidly de-lever towards its targeted level of under 3.5x debt/EBITDA," Le Guay added.

M6 Midstream intends to use the loan proceeds and $745 million of sponsor equity to finance the acquisition of the company by its sponsor.

The outlook is stable.

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