Williams downgraded on merger concerns: Fitch

OREANDA-NEWS. January 15, 2016. Fitch Ratings downgraded both Williams Companies and Williams Partners down a notch to BB+ and BB- this week, citing concerns over the upcoming merger with Energy Transfer, which is set to close in the second quarter.

Credit ratings for Williams' gas pipeline subsidiaries Transcontinental Gas Pipe Line Company and Northwest Pipeline were also downgraded one notch.

"The transaction created uncertainty regarding the future direction of WPZ's balance sheet and credit profile," Fitch analysts Kathleen Connelly and Peter Molica wrote. They cite large capital spending programs by both companies that may require the issuance of further debt.

"Like other master limited partnerships, WPZ's access to the capital markets is more restricted than in the past when commodity prices were stronger," they said.

The deal announced in September would combine Energy Transfer's 71,000 miles of natural gas, NGL, refined products and crude pipelines with Williams' 33,000 miles of pipelines. Together, they would operate more pipelines than Kinder Morgan, which owns or operates about 84,000 miles of pipelines.