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S&P: Spectra Energy unchanged
Standard & Poor's said that its rating on Spectra Energy Corp. (BBB+/stable) is unaffected by the announcement that its board of directors has authorized a repurchase of up to $600 million of common stock.
The transaction should represent an estimated 4% of current shares outstanding and is expected to be financed through a $250 million special dividend from DCP Midstream LLC (50% interest, BBB+/stable/A-2) and a combination of internal cash from earnings and asset rationalization, the agency said.
S&P said that it does not expect the share repurchase to affect ratings given the small size of the buyback.
However, Spectra's capital spending program requires a significant use of funds in 2008 and 2009 and any degree of financial underperformance below the projected level of key credit metrics could result in lower ratings or an outlook revision to negative, S&P added.
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