Rating agency KBRA verifies changes in the corporate structure following the merger between Tortoise Energy Infrastructure Corporation and Tortoise Sustainable & Social Impact Term Fund.
News Article: KBRA Confirms Stable Ratings for Tortoise Energy Infrastructure Corporation Despite Upcoming Merger
In a recent development, Kroll Bond Rating Agency (KBRA) has confirmed that the anticipated merger between Tortoise Energy Infrastructure Corporation (TYG) and Tortoise Sustainable & Social Impact Term Fund (TEAF) will not result in any downgrade, qualification, or withdrawal of its current ratings on TYG's Senior Notes and Mandatory Redeemable Preferred Stock (MRPS).
The merger, expected to close in the fourth quarter of 2025, will see TYG as the surviving entity, with TEAF's existing debt planned to be refinanced through an increase in TYG's credit facility. This refinancing is part of TYG's plans to issue a new series of Senior Notes and MRPS in August 2025, the proceeds of which will be used for refinancing of existing debt and for general corporate purposes.
The portfolio composition on a pro-forma basis is expected to remain similar, with asset quality, liquidity, and coverage ratios aligned with the existing TYG portfolio. This consistency in the portfolio is a key factor supporting KBRA's conclusion.
TYG's investment and operating strategy, which remains focused on investments in publicly traded companies involved in natural gas, crude oil, and refined petroleum products, will not change as a result of the merger.
Danica Rakic, Associate Director at KBRA, is the lead analyst for the KBRA analysis of the TYG-TEAF merger. Sana Jivani, Senior Director, and Thomas Speller, Global Head of Fund Finance, are also part of the analysis team. For more information, you can contact Danica at [email protected] or 44 20 8148 1012, Sana at [email protected] or 44 20 8148 1006, or Thomas at [email protected] or 44 20 8148 1025.
Mauricio Noé, Co-Head of Europe at KBRA, is the business development contact for the company and can be reached at [email protected] or 44 20 8148 1010.
Raymond Gallagher, an Associate at KBRA, is also involved in the analysis and can be contacted at [email protected] or 353 1 588 1186.
TEAF is a closed-end fund with an investment strategy focused on generating current income and total return, while making a positive social and environmental impact.
The press release regarding the TYG-TEAF merger was issued by Business Wire. For more information about Business Wire, you can visit their website or contact them at an email address not provided in this paragraph.
On a pro-forma basis, giving effect to the anticipated August 2025 issuance and the planned TYG-TEAF merger in the fourth quarter of 2025, TYG's Senior Asset Coverage is expected to change from 647%, as of June 20, 2025, to 711%, and its Total Asset Coverage is expected to change from 500%, as of June 20, 2025, to 504%.
[1] Source: Business Wire press release [2] Source: Kroll Bond Rating Agency analysis
- The upcoming merger between Tortoise Energy Infrastructure Corporation (TYG) and Tortoise Sustainable & Social Impact Term Fund (TEAF) is expected to involve refinancing of existing debt through an increase in TYG's credit facility, which could potentially attract investors in the finance sector interested in infrastructure and real-estate.
- The merger will not alter TYG's investment strategy, which is centered on natural gas, crude oil, and refined petroleum products, making it an attractive option for businesses involved in the energy sector.
- The confirmation of stable ratings for TYG by Kroll Bond Rating Agency despite the upcoming merger may be good news for those in the news industry who cover financially-focused businesses, as well as for investors looking to stay updated on the performance of cloud-based infrastructure companies like TYG.
