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
CEO: Continental Adds Midland Basin Acreage, Explores Woodford, Barnett
2024-04-11 - Continental Resources is adding leases in Midland and Ector counties, Texas, as the private E&P hunts for drilling locations to explore. Continental is also testing deeper Barnett and Woodford intervals across its Permian footprint, CEO Doug Lawler said in an exclusive interview.
For Sale, Again: Oily Northern Midland’s HighPeak Energy
2024-03-08 - The E&P is looking to hitch a ride on heated, renewed Permian Basin M&A.
ConocoPhillips: Permian Basin a ‘Growth Engine’ for Lower 48
2024-05-15 - ConocoPhillips views the Permian Basin as a “growth engine” within its Lower 48 portfolio, the company’s Midland Basin Vice President Nick McKenna said during Hart Energy’s SUPER DUG event in Fort Worth.
Barnett & Beyond: Marathon, Oxy, Peers Testing Deeper Permian Zones
2024-04-29 - Marathon Oil, Occidental, Continental Resources and others are reaching under the Permian’s popular benches for new drilling locations. Analysts think there are areas of the basin where the Permian’s deeper zones can compete for capital.
TPH: Lower 48 to Shed Rigs Through 3Q Before Gas Plays Rebound
2024-03-13 - TPH&Co. analysis shows the Permian Basin will lose rigs near term, but as activity in gassy plays ticks up later this year, the Permian may be headed towards muted activity into 2025.