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Fitch: El Paso to positive
Fitch Ratings said it affirmed the ratings of El Paso Corp. and its core pipeline, master limited partnership and exploration and production subsidiaries following news of a planned spin-off of El Paso Exploration & Production.
El Paso's issuer default rating was affirmed at BB+, $1.5 billion senior secured revolving credit facility (2012) at BBB-, $500 million senior revolving credit facility (2011) at BB+ and senior notes and debentures at BB+.
El Paso Energy Capital Trust I's trust convertible preferred securities were affirmed at BB-, and Colorado Interstate Gas Co.'s issuer default rating was affirmed at BBB-, along with its senior debt at BBB-.
El Paso Natural Gas Co.'s issuer default rating was affirmed at BBB- and senior debt at BBB-, along with Southern Natural Gas Co.'s issuer default rating at BBB- and senior debt at BBB-.
Tennessee Gas Pipeline Co.'s issuer default rating was affirmed at BBB- and senior debt at BBB-.
El Paso Exploration & Production Co.'s issuer default rating was affirmed at BB+, senior secured revolving credit facility (2012) at BBB- and senior debt at BB+. Its outlook was revised to evolving.
El Paso Pipeline Partners Operating Co.'s issuer default rating was affirmed at BBB- and senior debt at BBB-.
Fitch also said it revised the outlooks of El Paso and its core pipeline subsidiaries to positive from stable.
The outlook for El Paso Pipeline Partners Operating is stable. The outlook for El Paso Exploration & Production was revised to evolving from stable.
The affirmations are reflective of the cash flow stability and low relative business risk profile of the company's interstate pipeline franchise, Fitch said, as well as the hedge positions and cost improvements at the company's upstream business.
The ratings recognize that El Paso is in the middle of a transformative capital spending plan, which will significantly increase both the size and scope of its pipeline franchise, the agency said.
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