KBRA Assigns Ratings to Tortoise Midstream Energy Fund, Inc. Senior Notes and Mandatory Redeemable Preferred Shares

Kroll Bond Rating Agency (KBRA) assigns a rating of AAA to Tortoise Midstream Energy Fund, Inc.’s (NTG or the "Fund") outstanding Senior Notes and an A+ rating to NTG’s outstanding Mandatory Redeemable Preferred Shares.

The Fund is registered under the Investment Company Act of 1940 (the "40 Act") and is a closed-end investment fund that is sponsored by Tortoise Capital Advisors, L.L.C. (the "Fund Adviser"). The Fund had its Initial Public Offering in July 2010 and its shares are listed on the New York Stock Exchange under the symbol NTG. The primary objective of NTG is to invest in midstream energy entities that own and operate a network of pipeline and energy-related infrastructure that gather, transport, process, and store natural gas liquids (NGLs) & natural gas.

The ratings are driven primarily by NTG’s strong asset coverage, liquidity, and management experience. Furthermore, NTG has demonstrated its willingness and ability to remain in compliance with 40 Act leverage thresholds with a goal to consistently exceed these levels and maintain downside cushion. This was most notable recently as NTG navigated through extremely challenging market conditions caused by the COVID-19 pandemic and the precipitous decline in the price of crude oil. The Fund Adviser successfully took steps to remain in compliance with 40 Act guidelines and insulate creditors and preferred shareholders. In KBRA’s view, NTG’s ability to withstand such a significant market dislocation demonstrates the strength of the Fund Adviser and the resiliency of its capital structure.

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Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the U.S. Information Disclosure Form located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the U.S. Information Disclosure Form referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

KBRA is a full-service credit rating agency registered as an NRSRO with the U.S. Securities and Exchange Commission. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.

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Contacts

Analytical
David Dicker, CFA, Associate Director (Lead Analyst)
+1 (646) 731-2449
ddicker@kbra.com

Gopal Narsimhamurthy, Director
+1 (646) 731-3392
gnarsimhamurthy@kbra.com

Jared Hong, Senior Analyst
+1 (646) 731-3311
jhong@kbra.com

Pramit Sheth, Managing Director (Rating Committee Chair)
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psheth@kbra.com

Business Development
Sted Dowd, Managing Director
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