Moody's downgrades EQT

Moody's Investors Service said it downgraded the senior unsecured ratings of EQT Corp. to Baa2 from Baa1 and affirmed its Prime-2 commercial paper rating and changed the outlook to stable from negative.

"The downgrade of EQT to Baa2 is driven by the ongoing rapid growth of its exploration and production business and consequent increase in its risk profile," Pete Speer, a Moody's vice president, said in a statement.

"The Baa2 rating reflects the company's credit profile as compared to other independent E&P companies with some added lift provided by its ownership of a lower risk natural gas utility."

EQT's Baa2 ratings are supported by the company's very low cost structure relative to its peers, enabling it to generate competitive investment returns in a relatively weak natural gas price environment, according to the agency.

The company's credit profile also benefits from the ownership of strategic gathering, transportation and storage assets, the agency added.

These attributes mitigate the risks of the company's limited geographic diversification, natural gas concentration and much smaller production scale, Moody's noted.

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