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Investing.com -- Moody’s Ratings has upgraded Hess Midstream Operations LP’s senior unsecured notes rating to Ba1 from Ba2, while affirming the company’s Ba1 Corporate Family Rating and Ba1-PD Probability of Default Rating.
The ratings agency also downgraded the company’s senior secured term loan and senior secured revolving credit facility to Ba1 from Baa1. The SGL-2 Speculative Grade Liquidity Rating remained unchanged, and the outlook continues to be stable.
"The unsecured notes and bank credit facilities are both now rated at the Ba1 CFR level, reflecting the company’s completely unsecured capital structure," said Sajjad Alam, Moody’s Vice President.
The upgrade of the unsecured notes and downgrade of the secured facilities follows the collateral requirement being removed after the company received an investment grade rating from another agency. All debt instruments now rank equally and share the same Ba1 rating.
Moody’s affirmed the CFR, acknowledging the benefits of Chevron’s controlling interest, but did not provide any rating lift due to significant third-party ownership and the company’s relative strategic importance to Chevron.
The Ba1 Corporate Family Rating is supported by Hess Midstream’s long-term, fee-based contracts with Chevron Corporation (NYSE:CVX), its main customer. The rating also reflects the company’s integrated midstream assets in the Williston Basin and its history of prudent financial management.
Moody’s expects Hess Midstream’s leverage to remain around 3x, with stable EBITDA through 2026 supported by minimum volume commitment contracts. Capital expenditure is projected to decrease in 2026 due to reduced rig activity by Chevron, while free cash flow is expected to increase compared to 2025.
The company’s credit profile benefits from Chevron’s control through ownership of its general partner and 37.9% limited partner ownership interests.
As of September 30, 2025, Hess Midstream had $356 million outstanding on its $1 billion revolving credit facility. The company is expected to maintain good liquidity through 2027, with no material debt maturities until July 2027 when its $400 million term loan matures.
The stable outlook reflects Moody’s expectation of stable cash flow and financial leverage through 2027.
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