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Moody's: Boardwalk Pipelines view negative
Moody's Investors Service said it changed the outlooks for Boardwalk Pipelines, LP, Gulf South Pipeline Co. and Texas Gas Transmission LLC to negative from stable.
At the same time, the agency affirmed Boardwalk's Baa2 senior unsecured ratings and Gulf South's and Texas Gas' Baa1 senior unsecured ratings.
These actions follow the announcement by Boardwalk Pipeline Partners, LP (unrated) that it is substantially reducing its distributions to investors in response to weaker expected earnings in its core pipeline and storage operations.
"The negative outlook highlights the fundamental earnings challenges for Boardwalk's core pipelines and storage business and the execution risks for replacing those earnings and restoring growth," Moody's vice president Pete Speer said in a news release.
"The large distribution cut greatly enhances the partnership's financial flexibility for capital reinvestment or debt reduction. This credit friendly response combined with Loews' ongoing financial support buttresses Boardwalk's ratings."
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