KBRA assigns a rating of AAA to Tortoise Energy Infrastructure Corp.’s ("TYG" or the “Fund”) Senior Notes Series VV and Series WW and an A+ rating to TYG’s Mandatory Redeemable Preferred Shares Series J.

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 (the "Firm" or "Tortoise"). The Fund had its Initial Public Offering in February 2004, and its shares are listed on the New York Stock Exchange under the symbol TYG. TYG invests in energy infrastructure companies that generate, transport and distribute electricity, as well as process, store, distribute and market natural gas and natural gas liquids.

The ratings are driven primarily by TYG’s strong asset coverage, liquidity, and management experience. Furthermore, TYG 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.

TYG is planning to merge with Tortoise Sustainable & Social Impact Term Fund (TEAF), a closed-end fund with an investment strategy focused on assets that generate current income and total return while also delivering positive social and environmental impact. The merger is expected to be completed by the forth quarter of 2025, with a shareholder meeting scheduled for September 2025. Post merger, TYG will be the surviving entity and there will be no change to TYG’s existing investment and operating strategy. Following the merger, TEAF’s outstanding leverage is expected to be consolidated into TYG’s credit facility. KBRA has issued a Rating Agency Confirmation (RAC) on July 31, 2025 to confirm the proposed merger will not result in a downgrade of the existing ratings of TYG Senior Notes and MRPS.

Key Credit Considerations

• Asset Coverage: As a fund registered under the Investment Company Act of 1940, regulatory requirements dictate minimum asset coverage ratios of 300% on senior debt and 200% on total leverage (with respect to senior debt and preferred stock) in order for TYG to maintain the ability to issue additional debt or preferred shares and pay dividends. Tortoise Capital Advisors has demonstrated its ability and willingness to meet these asset coverage requirements with a goal to consistently exceed these levels and maintain downside cushion. Furthermore, distributions to common shareholders are only permitted so long as total asset coverage is greater than 225%. This coverage level as it relates to distributions highly incentivizes the Fund’s management team to maintain its asset coverage cushion.
• Liquidity: At least 90% of TYG’s total investments are invested in securities of energy infrastructure companies. TYG may also invest up to 30% of its total investments in restricted securities which are less liquid than securities trading in the open market because of statutory and contractual restrictions on resale. As the portfolio is primarily invested in publicly traded securities, the liquidity of the Fund’s assets is relatively strong. Despite the strong liquidity profile, the manager is largely reliant on sales into public markets, which may not always reflect the intrinsic value of the underlying companies.
• Non-diversified Investments: TYG is a non-diversified closed-end fund that focuses primarily on energy infrastructure companies. As a non-diversified fund in the energy infrastructure space, the Fund faces idiosyncratic risk that cannot be mitigated through industry diversification.
• Sponsor Experience: Founded in 2002, Tortoise had approximately $9.1 billion of assets under management as of July 2025, with approximately 40 employees in Kansas City. Tortoise provides investors with access to active and passive investment solutions across the capital structure. The Firm offers a variety of investment vehicles including separately managed accounts, closed-end funds, open end funds, interval funds, private funds and exchange-traded products. Investments are focused on energy and power infrastructure, energy transition, sustainable infrastructure, water & environment and social impact.

Rating Sensitivities

A deterioration in asset coverage levels below '40 Act requirements and the Fund manager’s inability to liquidate assets and demonstrate intention to cure within the 30-day time-period could result in a negative rating change. Conversely, a trend of stable asset performance coupled with improvements to asset coverage could result in positive rating changes.

Investment Fund Debt Rating Determinants

Quantitative Factors

• Asset Quality: Asset quality was determined based on an assessment of the underlying collateral that supports the payment of interest and principal on the Senior Notes and MRPS. Based on an analysis of the current portfolio, the investments consist primarily of equity securities.
• Asset Coverage: As a fund registered under the Investment Company Act of 1940, TYG is subject to regulatory requirements which dictate minimum asset coverage ratios of 300% on senior debt and 200% on total leverage. Furthermore, distributions to common shareholders are not allowed unless asset coverage levels relative to total leverage exceeds 225%. This highly incentivizes TYG to maintain its asset coverage cushion. Following the stabilization of the fund’s leverage profile after enduring COVID-19 related market volatility, asset coverage for both the Senior Notes and the MRPS have consistently remained above these target thresholds. The new issuance proceeds of Senior Notes Series VV and Series WW and MRPS Series J will be used to reduce the outstanding balance on the credit facility and for general corporate purposes. As such, post issuance of the new series the asset coverage will remain in line with the previous asset coverage.
• Liquidity: As the portfolio is invested mostly in publicly traded securities, the liquidity of Fund assets is relatively strong. With that said, the investment manager is largely reliant on sales into public markets, which may not always reflect intrinsic value of the underlying companies.
• Duration: Due to the ongoing nature of the Fund, its portfolio of assets and management, there is no meaningful duration measurement associated with the underlying collateral supporting this transaction.
• Cash Flow Analysis: Given the nature of the assets of the Fund, the risk of the Fund failing to meet interest and principal obligations on the preferred shares is already captured in the Asset Coverage and Liquidity determinants. As such, no weight is assigned to this determinant.

Qualitative Factors

• Manager Review: KBRA’s manager review considers the Manager’s capabilities, track record and policies and procedures.
• Other: KBRA qualitatively considers the Manager’s demonstrated ability and willingness to consistently exceed 40 Act asset coverage levels.

ESG Considerations

KBRA typically analyzes Environmental, Social, and Governance (ESG) factors through the lens of how management teams plan for and manage relevant ESG risks and opportunities. More information on KBRA’s approach to ESG risk management when evaluating funds can be found here. Over the medium-term, funds and other financial institutions will need to prioritize ESG risk management and disclosure with the likelihood of expansions in ESG-related regulation and rising investor focus on ESG issues.

To access ratings and relevant documents, click here.

Methodologies

• Funds: Investment Fund Debt Global Rating Methodology
• ESG Global Rating Methodology

Disclosures

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 Information Disclosure Form(s) located here.

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

This credit rating is endorsed by Kroll Bond Rating Agency Europe Limited for use in the European Union and by Kroll Bond Rating Agency UK Limited for use in the UK. Information on a credit rating’s endorsement status is available on its rating page at KBRA.com.

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

There are certain issuers, entities or transactions rated by KBRA Europe or KBRA UK that may be or have relationships with Shareholders and/or Shareholder-Related Companies, as that term is defined in KBRA’s Shareholder and Shareholder Related Companies for KBRA Europe and KBRA UK Policy and Procedure. Relevant disclosure information may be found here.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1010888

View source version on businesswire.com: https://www.businesswire.com/news/home/20250821076567/en/