S&P switches TC Energy view to negative

S&P said it revised its outlook for TC Energy Corp. to negative from stable and affirmed its BBB+ issuer rating.

The outlook change follows TC reporting of an updated cost estimate for its Coastal GasLink project. The about C$3.3 billion increase will bring the estimated total cost of the project to C$14.5 billion.

The company plans to sell assets to fund its capital program and the project’s higher cost.

“The negative outlook reflects the uncertainty regarding any asset sales in support of the company's announced capital program as well as the increased costs at the Coastal GasLink project. Although we believe TC has assets that would be attractive to potential purchasers, it is not clear as to the impact on business risk of such sales or whether the ultimate amount and EBITDA impact of such sales will allow the company to reduce its leverage consistent with the rating,” S&P said in a statement.

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