El Paso Energy Shelf Rated Prelim BBB-/BB+ by S&P.NEW YORK--(BUSINESS WIRE)--Oct. 6, 1998--Standard & Poor's CreditWire 10/6/98 -- Standard & Poor's today assigned its preliminary triple-'B'-minus/double-'B'-plus rating to El Paso El Paso (ĕl pă`sō), city (1990 pop. 515,342), seat of El Paso co., extreme W Tex., on the Rio Grande opposite Juárez, Mex.; inc. 1873. Energy Corp.'s $565 million shelf registration of debt securities and preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. . A triple-'B' corporate credit rating also was assigned to the company. At the same time, Standard & Poor's lowered the rating on El Paso Energy Capital Trust I's $325 million trust convertible preferred securities to double-'B'-plus from triple-'B'-minus, reflecting a change in the guarantor guarantor n. a person or entity that agrees to be responsible for another's debt or performance under a contract, if the other fails to pay or perform. (See: guarantee) GUARANTOR, contracts. He who makes a guaranty. 2. on this security to El Paso Energy Corp. from El Paso Natural Gas El Paso Natural Gas is a system of natural gas pipelines that brings gas from the Permian Basin in Texas and the San Juan Basin in New Mexico and Colorado to West Texas, New Mexico, Nevada, California and Arizona. It also exports some natural gas to Mexico. Co. Also, Standard & Poor's lowered the rating on El Paso Tennessee Pipeline Co.'s preferred stock to double-'B'-plus from triple-'B'-minus, recognizing the junior ranking of preferred stock. The remaining obligations within the El Paso Energy Corp. family of companies are affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. (see list below). The ratings outlook is stable. Credit quality at El Paso Energy is supported by the company's large, coast-to-coast interstate natural gas pipeline system. This is countered by a weak, although improving, financial profile and a growing portfolio in riskier, nonregulated energy projects. The firm's Tennessee Gas Pipeline Tennessee Gas Pipeline (TGPL) is a natural gas pipeline which runs from the Gulf of Mexico coast in Texas and Louisiana up through Arkansas, Kentucky, Tennessee, Ohio, and Pennsylvania to deliver gas in West Virginia, New Jersey, New York, and New England. (TGP TGP Thumbnail Gallery Post TGP Three Gorges Probe (China) TGP Tau Gamma Phi (fraternity) TGP Total Gas Pressure (dissolved gas content in water) ) system has expansion opportunities, but is competitively challenged by somewhat high rates and the expiration of 70% of existing firm contracts by November 2000. Yet rate recovery of restructured gas contract costs has been resolved, and re-contracting risk will be somewhat diffused dif·fuse v. dif·fused, dif·fus·ing, dif·fus·es v.tr. 1. To pour out and cause to spread freely. 2. To spread about or scatter; disseminate. 3. through strict cost control. Throughput on the El Paso Natural Gas pipeline system is secure due to low transportation rates and access to sizable siz·a·ble also size·a·ble adj. Of considerable size; fairly large. siz  a·ble·ness n. , inexpensive reserves.The sale to Dynegy Inc. of all the El Paso Natural Gas pipeline system's available excess firm capacity into California through 1999 provides short-term earnings and cash flow certainty, with possible further gains from ship-or-pay contracts. Beyond 1999, however, some revenue could be at risk. The Leviathan leviathan (lēvī`əthən), in the Bible, aquatic monster, presumably the crocodile, the whale, or a dragon. It was a symbol of evil to be ultimately defeated by the power of good. Gas Pipeline acquisition, when combined with existing field service operations, provides a critical mass of gathering assets, creates a strong header system across the Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east , and provides TGP customers access to large-scale competitively priced supplies. Financial performance should improve gradually as the El Paso Natural Gas pipeline and TGP systems are integrated and growth opportunities are attained. El Paso Energy is expected to keep adjusted debt leverage below 55%, while funds flow should exceed 20% of adjusted total debt obligations. OUTLOOK: STABLE Credit stability reflects the healthy pipeline business profile in broad, diverse markets. Capital commitments to nonregulated activities in gas gathering, processing, and marketing will continue to be substantial and should add to earnings and cash flow growth, while increasing the consolidated business risk profile of the entire enterprise. -- CreditWire -0- RATING ASSIGNED El Paso Energy Corp. Corp credit rtg BBB/Stable/-- $565 mil shelf reg (prelim) BBB-/BB+ RATINGS REVISED To From El Paso Tennessee Pipeline Co. Pfd stk BB+ BBB- El Paso Energy Capital Trust I Pfd Stock (gtd: El Paso Energy Corp.) BB+ BBB- RATINGS AFFIRMED El Paso Natural Gas Co. Corp credit rtg BBB/Stable/A-2 Sr unsecd debt BBB Bank loan rtg BBB Commercial Paper A-2 El Paso Tennessee Pipeline Co. Corp credit rtg BBB-/Stable/-- Sr unsecd debt BBB- El Paso Energy Credit Corp. Corp credit rtg BBB/Stable/-- Sr unsecd debt BBB Sub debt BBB- Tennessee Gas Pipeline Co. Corp credit rtg BBB/Stable/-- Sr unsecd debt BBB |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion