TCA.PR.X and TCA.PR.Y Credit Review : Developing Implications

Transcanada Pipelines did a deal!

TransCanada Corporation (TransCanada) today announced plans to significantly expand its continental natural gas pipeline and storage operations by acquiring ANR Pipeline Company and ANR Storage Company (collectively, ANR) and an additional 3.55 per cent interest in Great Lakes Gas Transmission Limited Partnership (Great Lakes) from El Paso Corporation. The total purchase price is US$3.4 billion, subject to certain closing adjustments, and includes US$457 million of assumed debt.

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TransCanada intends to fund the acquisition in a manner consistent with maintaining its strong financial position and TransCanada PipeLines Limited’s ‘A’ credit ratings recognizing the solid strategic fit and business fundamentals of the acquired assets. In addition to the assumption of existing debt, the acquisition will be financed with components of incremental debt as well as a significant amount of new equity. TransCanada expects the transaction to be accretive to earnings and cash flow in the first full year of ownership. Pending regulatory approvals, the acquisition is expected to close in the first quarter of 2007.

We will see what they have in mind! DBRS has reacted:

Dominion Bond Rating Service (DBRS) has today placed the following ratings of TransCanada PipeLines Limited (TCPL or the Company) Under Review with Developing Implications”: First Mortgage Bonds, Unsecured Debentures & Notes, Preferred Securities (COPrS) and Preferred Shares – cumulative. Concurrently, DBRS has confirmed TCPL’s Commercial Paper rating at R-1 (low) with a Stable trend.

 

4 Responses to “TCA.PR.X and TCA.PR.Y Credit Review : Developing Implications”

  1. […] Feeling the effects of the credit review? Now has a pre-tax bid-YTW of 4.34% based on a bid of 53.55 and a call 2013-11-14 at 50.00. Now trading with an enormous spread: the quote is 53.55-54.61. […]

  2. […] Feeling the effects of the http://www.prefblog.com/?p=427″>credit review? Now has a pre-tax bid-YTW of 4.34% based on a bid of 53.55 and a call 2013-11-14 at 50.00. Now trading with an enormous spread: the quote is 53.55-54.61. […]

  3. […] Readers will recall that DBRS placed these issues Under Review with Developing Implications in December: DBRS estimates that, on a pro forma consolidated basis, the Company’s debt-to-capital ratio (62% on a DBRS-adjusted basis as at September 30, 2006) would rise to 69% on a 100% debt-financed basis. […]

  4. […] were some credit worries when they made a big investment in Dec 06, but these were taken care of by an equity […]

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