Moody's views TransCanada negatively

Moody’s Investors Service said it revised its outlooks for TransCanada PipeLines Ltd. and its parent TC Energy Corp. to negative from stable. Additionally, the agency changed the outlooks to negative from stable for subsidiaries ANR Pipeline Co., Gas Transmission Northwest LLC, NOVA Gas Transmission, TransCanada Trust and TC Pipelines LP.

"The negative outlook on TransCanada and its subsidiaries is driven by the company's announcement that the latest cost estimate for the Coastal Gaslink Project has grown to C$14.5 billion, up significantly from the last cost estimate of C$11.2 billion and over double the initial cost estimate of C$6.2 billion," said Gavin MacFarlane, a Moody’s vice president and senior credit officer, in a press release.

"The company has indicated it does not plan to issue discrete equity to address these cost increases and instead plans to sell assets to support its balance sheet. The negative outlook considers the material execution risk associated with the size, timing and valuation of these asset sales," MacFarlane added.

Moody’s affirmed TransCanada PipeLines’ Baa1 senior unsecured and Issuer ratings, its Baa2 junior subordinate ratings, TC Energy’s Baa2 issuer ratings and the subsidiaries’ ratings.

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