Moody's cuts Kinder Morgan CP to Prime-3

Moody's Investors Service said it affirmed the long-term debt ratings of Knight, Inc.'s Ba3 junior subordinated and Ba1 senior first secured ratings, and Kinder Morgan Energy Partners, LP's Baa2 senior unsecured note rating.

The agency downgraded Kinder Morgan's commercial paper rating to Prime-3 from Prime-2.

The outlook is negative.

The actions reflect Kinder Morgan's rising leverage, in part from heavy spending in excess of cash flow for major additions to perhaps the strongest portfolio already in the midstream master limited partnership space, according to the agency.

Kinder Morgan's standalone debt-to-EBITDA ratio at year-end 2008 was 4.35x, under its bank revolver definitions, and is likely to rise during 2009, the agency said.

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