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Fitch raises Kinder Morgan's ratings, shifts outlook to stable

Fitch Ratings on May 29 lifted its ratings on Kinder Morgan Inc. by one notch, citing the cash flow stability of the company's asset base and improved leverage, among other factors. The ratings outlook was revised to stable from positive.

The rating agency upgraded Kinder Morgan and its subsidiaries' long-term issuer default rating and senior unsecured ratings to BBB from BBB-. The subsidiaries, which also had their outlooks changed to stable from positive, include Colorado Interstate Gas Co. LLC, El Paso Natural Gas Co. LLC, Kinder Morgan Energy Partners LP and Tennessee Gas Pipeline Co.

In addition, Fitch bumped up Kinder Morgan Finance Co. LLC's long-term senior unsecured rating to BBB from BBB-.

Kinder Morgan also saw its short-term issuer default rating and commercial paper rating raised to F2 from F3. Its other subsidiaries — El Paso Energy Capital Trust I, KN Capital Trust I and KN Capital Trust III — had their long-term preferred ratings upgraded to BB+ from BB.

The upgraded ratings reflected Fitch's view that the cash flow stability of Kinder Morgan's asset base is "strong and stable enough" to support leverage in the 4.5x to 5.0x range at a higher rating. The upgrades are also in line with the view that the company's size, scale, location and business line can help it handle "slightly higher relative debt levels through the cycle."