Fitch may cut Kinder Morgan

Fitch Ratings said it placed on Rating Watch negative Kinder Morgan Kansas, Inc.'s issuer default rating of BB+, secured notes and debentures rating of BB+ and secured revolving credit facility rating of BB+.

Also placed on negative watch includes Kinder Morgan Finance Co., LLC's secured notes rating of BB+, KN Capital Trust I's trust preferred rating of BB- and KN Capital Trust III's trust preferred rating of BB-.

Fitch also said it affirmed Kinder Morgan Energy Partners, LP's issuer default rating of BBB, senior unsecured debt rating at BBB, short-term issuer default rating of F2 and short-term commercial-paper debt rating at F2.

The action follows the announced agreement whereby Kinder Morgan, Inc., parent company to Kinder Morgan Kansas, will acquire the outstanding shares of El Paso Corp. in a $38 billion transaction expected to close in the second quarter of 2012, Fitch said.

The negative watch reflects the transactional risk associated with the purchase of El Paso and planned asset sales and dropdowns that are essential to the subsequent pay down of acquisition debt, the agency said.

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