PrefBlog

Standard & Poor’s has announced:

• We are placing our ratings on Westcoast Energy Inc. on CreditWatch with negative implications.
• The CreditWatch placement reflects that on parent Spectra Energy Corp.
• The CreditWatch listing on Spectra reflects our expectation that we could lower the ratings following the sale of its U.S. gas transmission and storage asset to Spectra Energy Partners L.P. by the end of 2013.
• We will resolve the CreditWatch placement on Westcoast when we resolve the placement on Spectra.

…
We have equalized our ratings on Westcoast with those on parent Spectra. We link the parent and operating company’s credit profiles based on our methodology for holding company structures. Accordingly, any rating action on Spectra would likely flow through to our ratings on Westcoast. In our view, there are no adequately robust regulatory or legal provisions that would constrain Spectra’s ability to extract economic value from Westcoast. However, we believe that Westcoast’s wholly owned subsidiary, Union Gas Ltd. (BBB+/Watch Neg/A-2), possesses some regulatory provisions that diminish the parent’s economic recourse to it. Union Gas makes up approximately 43% of the company’s consolidated debt. We have equalized Westcoast’s management and governance score with Spectra.

The action on UNG was previously reported on PrefBlog.

Westcoast is the proud issuer of two series of preferred shares, W.PR.H and W.PR.J, both Straight Perpetuals.

This entry was posted on Monday, June 24th, 2013 at 4:24 am and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.