Fitch changes Brooklyn Union Gas to stable

Fitch Ratings said it affirmed the BBB+ long-term issuer default ratings of KeySpan Corp. (KSE) and its utility subsidiaries Brooklyn Union Gas Co. (BUG) and KeySpan Gas East Corp.

The agency also affirmed KeySpan’s senior unsecured debt ratings of BBB+ and Brooklyn Union Gas’ and KeySpan Gas’ senior unsecured debt ratings at A-.

In addition, Fitch revised Brooklyn Union Gas’ outlook to stable from negative. The outlooks on KeySpan and KeySpan Gas remain stable.

Fitch said the outlook revision reflects its greater confidence that Brooklyn Union Gas can sustain leverage metrics below the 5 times FFO-adjusted leverage negative-rating trigger over the forecast horizon.

“Fitch forecasts FFO-adjusted leverage to be range-bound between 4.2x and 4.8x over 2018-2021, compared with the low 5x range Fitch previously projected,” the agency said in a news release.

“The moderately improved financial profile follows an equity infusion of $350 million by KSE in 2017 and cash proceeds of approximately $170 million from BUG's divestiture of its equity ownership into Dominion Midstream Partners, LP in early 2018. The incremental cash partly relieves leverage pressures stemming from BUG's elevated capital spending program and associated debt funding.”

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