OREANDA-NEWS. S&P Global Ratings said today it assigned its 'BBB-' issue-level rating to Macquarie Infrastructure Corp.'s proposed convertible senior notes due 2023. The 'BBB-' corporate credit rating and stable outlook are unchanged.

MIC's portfolio consists of investments in operating companies that use nonrecourse debt to MIC. MIC has mostly corporate subsidiaries in the energy and aviation-related services and infrastructure segments located entirely in North America. We project roughly 80% of the dividends MIC receives to come from its investments ITT Holdings LLC (IMTT) and Atlantic Aviation, with the majority coming from IMTT.

IMTT is a bulk liquid storage terminal business that generates revenues from modestly diverse products, including refined petroleum products, various chemicals (mainly methanol, ethanol, and alcohol), renewable fuels (biodiesel), and vegetable/animal oils. Atlantic Aviation is the second-largest provider of fixed-base operation services to the general aviation market in the U. S. Atlantic Aviation provides fuel and ancillary services to the general aviation market, primarily business jets corporations and individuals own. It also provides aircraft maintenance and ancillary services to support its core business.

"The stable outlook reflects our view that Macquarie Infrastructure Corp.'s underlying investments will continue to pay steady dividends to MIC, leading to consolidated adjusted debt to EBITDA in the 4.5x to 5x area," said S&P Global Ratings credit analyst Mike Llanos.

We could lower the ratings if MIC's underlying businesses materially underperform, resulting in a deterioration of the quality of distributions, such that consolidated debt to EBITDA increases above 5x.

Higher ratings are unlikely absent further conservatively financed acquisitions that would generate stable cash flow, while lowering MIC's exposure to its investments, IMTT and Atlantic Aviation FBO Inc., and keeping leverage at existing levels.