S&P lowers Williams Partners

Standard & Poor’s said it lowered the corporate credit rating on Williams Partners LP and its wholly owned subsidiaries, Northwest Pipeline LLC and Transcontinental Gas Pipe Line Co. LLC, to BBB- from BBB.

The outlook is stable.

The agency also said it lowered the ratings on Williams Partners’ senior unsecured debt to BBB- from BBB, lowered the commercial-paper rating to A-3 from A-2 and lowered the short-term rating to A-3 from A-2.

S&P also said it lowered the ratings on the subsidiaries’ senior unsecured debt to BBB- from BBB.

The agency also said it placed the BB+ corporate credit rating on the Williams Cos. on CreditWatch with negative implications.

S&P also said it removed the BB corporate credit rating on Energy Transfer Equity from CreditWatch, where it was placed with positive implications in September 2015.

The outlook is stable.

S&P said it affirmed the BBB- corporate credit ratings on Energy Transfer Partners LP and its wholly owned subsidiary, Panhandle Eastern Pipe Line Co. LP.

The downgrade on Williams Partners reflects challenging industry conditions that have constrained the partnership’s volumes and commodity-sensitive margins materially beyond previous expectations, the agency said.

The company’s low unit price has made it prohibitively expensive to raise equity and fund its large-scale capital spending program in a balanced manner, S&P said.

These conditions are expected to persist through at least 2016 and debt-to-EBITDA is expected to be about 4.9x in 2016 before cash flow from growth projects improves leverage to the 4.4x range in 2017, the agency said.

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