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Fitch upgrades Columbia Pipeline's ratings over TransCanada's acquisition

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Fitch upgrades Columbia Pipeline's ratings over TransCanada's acquisition

Fitchupgraded ratings of ColumbiaPipeline Group Inc., owner of large natural gas transportation andstorage networks, shortly after TransCanada Corp.'s acquisition of the Texas-based firmthat includes the assumption of its $2.8 billion of debt.

ColumbiaPipeline's long-term issuer default rating, or IDR, and senior unsecured ratingwere raised to BBB+ from BBB- and have been removed from rating watch positive,according to a July 15 news release.

Themidstream company's short-term IDR and commercial paper rating have also beenupgraded to F2 from F3. Both ratings were withdrawn. The ratings outlook isstable.

Theacquisition includes TransCanada's ownership of 46.5% of ,Columbia Pipeline's master limited partnership, through limited partnershipunits and the general partnership interest.

"Fitchviews the acquisition of [Columbia Pipeline] as favorable for TransCanada.[Columbia Pipeline's] assets will further increase TransCanada'sdiversity," the rating agency said. "TransCanada anticipates anannual benefit of approximately $250 million a year from cost saving andfinancing. Importantly, [Columbia Pipeline] allows TransCanada to participatein the Marcellus/Utica shale plays and provides a significant amount of organicgrowth activity throughout [Columbia Pipeline's] existing platform."

Earlierin July, S&P Global Ratings also upgraded Columbia Pipeline's ratings.

S&P Global Ratings andS&P Global Market Intelligence are owned by S&P Global Inc.