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Fitch reviews Williams, Transco, Northwest Pipeline
Fitch Ratings said it placed Williams Partners, LP’s, Transcontinental Gas Pipe Line Co. LLC’s (Transco) and Northwest Pipeline Co. LLC’s BBB- long-term issuer default ratings and senior unsecured debt ratings on Rating Watch Positive.
The agency also placed Williams Partners’ F3 short-term issuer default rating and commercial paper rating on Rating Watch Positive.
The actions follow the announcement that Williams Partners agreed to sell 100% of its membership interest in Williams Olefins LLC, which owns a 88.46% undivided ownership in the Geismar olefins plant. Total consideration for the transaction is expected to be $2.1 billion in cash subject to customary closing conditions. The transaction is expected to close in the summer 2017, and will require regulatory approvals.
“The Positive Rating Watch considers that with the sale of the Geismar stake the partnership's revenues would be over 95% fee-based,” the agency said in a news release.
“Further, the sales proceeds will build on the momentum created by the $2 billion equity infusion by the Williams Cos., Inc. (WMB; BB+/stable). While Geismar is a material component of WPZ EBITDA, the sale will reduce operational risk and chemical commodity-price risk.”
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