Moody’s: Kinder Morgan view to negative

Moody's Investors Service said it changed Kinder Morgan Inc.'s outlook to negative from stable and affirmed the Baa3 senior unsecured and Prime-3 commercial paper ratings.

On Nov. 30, Kinder Morgan announced an agreement to increase its ownership in Natural Gas Pipeline Company of America LLC (NGPL, Caa2 negative) to 50% from 20% for about $136 million. Brookfield Infrastructure Partners LP (unrated) will own the remaining 50%. Proportionate consolidation of NGPL's debt will add about $1.5 billion to Kinder Morgan’s consolidated debt. NGPL's trailing 12-month Sept. 30 EBITDA was $273 million (gross).

"The negative outlook reflects Kinder Morgan's increased business risk profile and additional pressure on its already high leverage that will result from its agreement to increase ownership in NGPL, a distressed company," Moody's senior vice president Terry Marshall said in a news release.

"NGPL is facing potential default on its pending interest payments, suggesting that KMI will need to provide cash injections, which will likely be debt funded initially."

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