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DBRS might cut Kinder Morgan
DBRS said it placed Kinder Morgan Canada Ltd.’s preferred shares cumulative rating of Pfd-3 (high) and Kinder Morgan Cochin ULC’s issuer rating of BBB (high) under review with negative implications.
The agency said the action follows the announcement that Canada (AAA, stable) has agreed to purchase the existing Trans Mountain Pipeline System and the Trans Mountain Expansion Project for C$4.5 billion.
As part of the agreement, Canada has agreed to fund the resumption of the Trans Mountain Expansion Project planning and construction work by guaranteeing its expenditures under a separate federal government recourse credit facility until the transaction closes.
“Although the TMEP project overhang and legal risks are removed for the company, the remaining assets have a relatively weaker credit profile compared with the assets being sold,” DBRS said in a news release.
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