Moody's downgrades TransCanada

Moody's Investors Service said it downgraded the senior unsecured ratings of TransCanada PipeLines Ltd. to Baa1 from A3.

The agency also said it downgraded the company's other issuers within the family, including TransCanada Corp.'s issuer rating to Baa2 from Baa1, Nova Gas Transmission Ltd.'s senior unsecured rating to Baa1 from A3 and TransCanada Trust's subordinated unsecured notes to Baa3 from Baa2.

Moody's also said it affirmed the prime-2 short-term commercial-paper ratings on TransCanada, TransCanada American Investments Ltd. and TransCanada PipeLine USA Ltd.

The outlooks on the companies were revised to stable from negative.

TransCanada's financial profile has been weak for several years, Moody's explained.

The downgrade reflects an expectation that debt-to-EBITDA will improve from 5.6x at the end of 2018, but remain around 5x in 2019 and 2020, the agency said.

The company has experienced challenges executing its large capital program, leading to delays in EBITDA growth and some cost-overruns, Moody's said.

The ratings are driven by the company's predictable and growing cash flow, owing to the regulated and contracted nature of its businesses and its large size and portfolio diversification benefits, the agency said.

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