Moody’s changes Energy Transfer view to stable

Moody's Investors Service said it changed Energy Transfer Partners, LP's outlook to stable from negative.

Moody's also affirmed the Baa3 senior unsecured rating, Ba1 junior subordinated debt rating, Ba2 preferred stock rating and its Prime-3 short term rating.

The Ba2 secured notes rating on Energy Transfer Equity, LP remains under review for upgrade.

Moody's withdrew Energy Transfer Equity’s Ba2 corporate family rating, Ba2-PD probability of default rating and SGL-3 liquidity rating.

The agency also affirmed Panhandle Eastern Pipe Line Co., LP's Baa3 senior unsecured rating and the outlook remains stable.

Moody’s said the actions follow the approval by Energy Transfer Partners unitholders on Oct. 18 of Energy Transfer Equity’s acquisition of all of the publicly outstanding common units of Energy Transfer Partners in exchange for Energy Transfer Equity units in an all unit-for-unit transaction.

“This simplification transaction, which, with the elimination of ETE's Incentive Distribution Rights (IDRs) in ETP, will relieve ETP of the punitive IDR burden on its cost of capital, while enabling it to retain a significantly greater amount of cash flow with which to fund its future growth,” Andrew Brooks, Moody's vice president, said in a news release.

“The combined entities' extremely large and diversified midstream asset base, generating largely fee-based cash flows, should enable the company to manage its financial leverage to a modestly lower level while maintaining high levels of distribution coverage.”

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