Fitch Ratings on Sept. 3 raised TC Energy Corp. subsidiary Columbia Pipeline Group Inc.'s long-term issuer default rating and senior unsecured rating to A- from BBB+, with a stable outlook.
Fitch based the upgrade on Columbia Pipeline's continuing completions of on-budget major projects and low debt due to equity contributions from TC Energy. The rating agency also expects the parent company to repay Columbia Pipeline's approaching bond maturity in June 2020 with an equity infusion.
Columbia Pipeline's ownership of the 12,000-mile Columbia Gas Transmission LLC natural gas pipeline network in the Appalachian Basin gives it a strategic position as the basin has been the largest source of gas production growth in the U.S., with long-term take-or-pay contracts also acting as key drivers in the upgrade, Fitch said in the report.
"Evaluating [TC Energy]-excluding-[Columbia Pipeline], and [Columbia Pipeline]-as-standalone, the conclusion is that both such entities would be rated comfortably at the 'A-' level," Fitch said.
