Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of Waterbridge Midstream Operating LLC
Global Credit Research - 10 Aug 2020
New York, August 10, 2020 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Waterbridge Midstream Operating LLC and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since 1 January 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion.
This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.
Key rating considerations are summarized below.
Waterbridge Midstream Operating, LLC's (Waterbridge) B3 Corporate Family Rating (CFR) reflects its fee-based earnings, and low working capital requirements for its water midstream business but also takes into account the high leverage and volumetric risks from E&P customers We expect that WaterBridge will grow EBITDA as volumes ramp back up but the pace will be slower than previously expected. The company benefits from its location in the Delaware Basin, acreage, and strong customer base. The rating is challenged by modest scale, reliance on increasing hydrocarbon production volumes, and the company's short track record. In addition to the strong acreage dedication from large investment grade producers, Waterbridge also benefits from its existing asset infrastructure in the Delaware Basin, letting it get around the challenges of permits and regulations that new entrants must usually comply with.
This document summarizes Moody's view as of the publication date and will not be updated until the next periodic review announcement, which will incorporate material changes in credit circumstances (if any) during the intervening period.
The principal methodology used for this review was Midstream Energy published in December 2018. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.
This announcement applies only to EU rated and EU endorsed ratings. Non EU rated and non EU endorsed ratings may be referenced above to the extent necessary, if they are part of the same analytical unit.
This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.
Arvinder Saluja, CFA Vice President - Senior Analyst Corporate Finance Group Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Steven Wood MD - Corporate Finance Corporate Finance Group JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Releasing Office: Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653
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