Fitch downgrades EQT

Fitch Ratings said downgraded EQT Corp.'s long-term issuer default rating to BBB- from BBB, senior unsecured debt to BBB- from BBB and short-term issuer default rating to F3 from F2.

The outlook is stable.

The downgrade was prompted by news that EQT will sell its regulated utility operations in Pennsylvania, West Virginia and Kentucky to Peoples Natural Gas, Fitch said.

The utility has generated stable cash flows and has not required significant investment, the agency said.

In exchange for the sale of the utility assets, EQT will receive about $720 million in cash, transmission pipelines that complement some of EQT's existing assets and commercial arrangements, Fitch said.

The sale is dependent on regulatory approvals and a Hart-Scott Rodino review.

Fitch noted that approval may be difficult given the Federal Trade Commission's past effort to block the two utilities from a previous merger deal.

Ratings concerns include the business risk profile stemming from EQT's growing focus on upstream operations and an ongoing pattern of negative free cash flow, the agency said.

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