Moody's: El Paso to positive

Moody's Investors Service said it revised the outlook to positive and affirmed the Ba3 ratings of El Paso Corp. and its subsidiaries, including El Paso Performance Linked Trust (Ba3), El Paso Energy Capital Trust I (B2), El Paso Pipeline Partners Operating Co. (Ba1), Colorado Interstate Gas Co. (Baa3), El Paso Natural Gas Co. (Baa3), El Paso Tennessee Pipeline Co. (Ba3), Tennessee Gas Pipeline Co. (Baa3) and Southern Natural Gas Co. (Baa3).

The revised outlook follows news of the planned spin-off of its exploration and production business, as well as the expectation for continuing debt reduction at the parent company level, Moody's said.

For El Paso, the spin-off will decrease earnings volatility and eliminate significant capital expenditure requirements that have been associated with the exploration business, the agency said.

Moody's also said it assigned a Baa3 rating to Southern Natural Gas Co.'s new $300 million senior unsecured notes. The new notes will be used to finance pipeline expansion projects and general corporate purposes, Moody's said.

The spin-off sets the stage for positive rating actions as the overall debt level is addressed, the agency said.

After the spin-off, El Paso will become a pure play pipeline company with high quality pipeline assets that generate stable and predictable cash flow, Moody's said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.