SMLP - Summit Midstream Partners: A Wager On The Credit Markets' Appetite For Risk

• Summit Midstream Partners, LP is trying to roll over debt in the amount of 4.34x 2021 EBITDA, with most of that debt due in March 2022.
• If Summit rolls over its 2022 maturities at rates analogous to recent debt issuances by other oil and gas companies, there could be significant upside.
• Summit's strong cash flow and 2021 Q4 capacity expansion, combined with the credit markets' appetite for risk, make some form of refinancing likely.
• The upside from current prices is significant enough that even an imperfect financing with some dilution and/or higher interest costs could still result in an excellent return.
• With an attractive risk/reward ratio, I'm taking a position that's small enough that I won't be upset if the company goes bust, but I won't regret not having bought more if it succeeds.

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