G&M - The usual kick 'em when they're down reportYes two agencies downgraded TRP credit ratings today (and one left ratings unchanged) . But those two agencies placed TRP on review/negative earlier this year when the company upped the projected costs of the CGL project.
And per the DBRS PR, the partial sale of CPG does not affect the company's business risk profile. So they are downgrading now because ???. Stay tuned I'm sure we'll be hearing more about the 'disaster' brewing at TRP. Earnings Friday... gonna be interesting to hear what management has to say. I wonder if this sale was a pre-emptive move against yet another hike in CGL costs?
>>>On Monday, TC Energy announced it is selling 40 per cent of Columbia to a private equity firm, and the US$3.9-billion sale price amounts to a far lower multiple to earnings than what TC originally paid....Credit rating agencies aren’t all that impressed, either. S&P Global is keeping TC Energy’s debt rating unchanged, but Moody’s Investors Service and DBRS Morningstar both downgraded the company one notch after the deal was announced. In its report Moody’s said the major asset sale “will not in itself be sufficient to offset pressure on the balance sheet.”
https://www.theglobeandmail.com/business/article-tc-energy-financial-difficulties-reasons/
>>>TCC’s business risk profile continues to be strong and is underpinned by predominantly regulated and contracted cash flow (95% of the 2023 estimated comparable EBITDA), strong supply and demand fundamentals at its natural gas pipelines and power assets and a diversified asset base. The impact of the sale of the Columbia Assets on TCC’s business risk profile is not material, and DBRS Morningstar expects the negative impact, if any, of additional capital rotation transactions on the Company’s business risk profile will be modest.
https://www.dbrsmorningstar.com/research/417662/dbrs-morningstar-downgrades-ratings-on-transcanada-pipelines-limited-nova-gas-transmission-ltd-and-trans-quebec-maritimes-pipeline-inc-to-bbb-high-and-tc-energy-corporation-to-pfd-3-high