Investing.com -- Moody’s Ratings has upgraded the Corporate Family Rating (CFR) of Global Partners LP (NYSE: GLP ) from B1 to Ba3. The Probability of Default Rating (PDR) has also been upgraded from B1-PD to Ba3-PD. In addition, the rating for senior unsecured notes has been raised to B1 from B2. The outlook for Global Partners has been revised from positive to stable.

The Speculative Grade Liquidity (SGL) rating for Global Partners has been enhanced to SGL-2 from SGL-3. This upgrade is a reflection of the company’s strong operating performance, its increased scale, and wider geographic reach following its acquisitions and growth investments during 2023-2024, as per Jonathan Teitel, a Moody’s Vice President.

Global Partners’ Ba3 CFR is a recognition of its long operating history and its refined products distribution system. The rating also takes into account the risks associated with the Master Limited Partnership (MLP) business model. The company has a large network of retail gasoline stations and convenience stores, in addition to a significant wholesale fuel distribution business with considerable storage capacity at multiple terminals.

Since December 2023, Global Partners has invested over $500 million to more than double its terminal network. It has grown both organically and through acquisitions, reaping benefits from economies of scale.

The SGL-2 rating is based on the expectation that Global Partners will maintain good liquidity. As of March 31, 2025, Global Partners had $167 million drawn on its revolving credit facility, $355 million on its working capital facility, and $64 million in letters of credit. The company also had $7 million in cash.

The company’s credit agreement covenants include a minimum working capital of $35 million, a minimum interest coverage ratio of 2.0x, a maximum senior secured leverage ratio of 3.5x, and a maximum total leverage ratio of 5.0x. The expectation is that Global Partners will remain compliant with these covenants.

The senior unsecured notes of Global Partners are rated B1, one notch below the CFR. This is due to their effective subordination to the company’s senior secured revolving credit and working capital facilities.

The stable outlook for Global Partners is based on the expectation of consistent operating performance, benefits from increased scale, and the maintenance of supportive credit metrics.

Factors that could lead to a further upgrade include significant EBITDA growth and debt/EBITDA sustained below 3.5x. On the other hand, a downgrade could occur if there is debt/EBITDA over 4.5x for a sustained period, weakening liquidity, or more aggressive financial policies.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.