Fitch rates NGPL notes BB-

Fitch Ratings said it assigned a BB- rating to NGPL PipeCo LLC's proposed $550 million senior secured notes due 2019.

The outlook is negative.

Proceeds will be used to help retire the company's outstanding $1.25 billion 6.154% senior notes due 2012.

The ratings reflect NGPL's weakening credit metrics, low commodity prices, reduced basis spreads and low volatility, the agency said.

Fitch said it expects NGPL's calendar 2012 debt to EBITDA to be about 7 times but could approach 6 times in the 2015 to 2016 time frame as the term loan B balance is reduced through the senior facilities' debt amortization and excess cash flow sweep provisions.

Other credit concerns include the relatively short average term of NGPCA's transportation contracts and related re-contracting risk, the limiting effect the reduced cash flows have on the company's operating flexibility and strategies, and the transaction risk associated with retiring the 2012 notes, the agency said.

Strengths include NGPL's strong Chicago/Midwest market franchise, its high-quality and reliable utility customer base, a strong demand for storage services, limited liquidity needs and its long record of managing contract rollovers, the agency noted.

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