Moody's might upgrade Spectra

Moody's Investors Service said it placed Spectra Energy Partners, LP's Baa3 senior debt rating under review for possible upgrade and affirmed Spectra Energy Capital, LLC's Baa2 senior debt rating with a stable outlook.

The review is in response to Spectra Corp.'s announcement of the details of its plan to drop down substantially all of the U.S. gas transmission and liquids assets into Spectra Energy Partners, its master limited partnership affiliate.

"This large contribution of high-quality assets from Spectra promises to expand Spectra Energy Partners' scale of operations and access to the capital markets," Moody's senior vice president Mihoko Manabe said about the potential upgrade of Spectra Energy Partners.

Moody said it affirmed Spectra Energy Capital's ratings because Spectra intends to use the sales proceeds to reduce Spectra Energy Capital's debt, thereby offsetting the negative impact of the reduction in the assets that directly support Spectra Energy Capital's debt.

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