Moody’s changes Enagas view

Moody's Investors Service said it changed to negative from stable the outlook of Enagas SA and Enagas Transporte, SA.

At the same time, Moody's affirmed the Baa1 long term issuer rating and the Prime-2 short-term issuer rating for Enagas as well as the Baa1 senior unsecured rating for Enagas Transporte.

The agency said the action follows Enagas' announcement that it has reached an agreement to acquire a 24.9% stake in Prairie ECI Acquiror LP (Tallgrass Holdco, B1 stable) for $590 million with an option to increase its stake by an additional 3.5% for around $83 million, subject to some conditions.

Tallgrass has a 43.9% share of economic rights and 100% share of governance rights in Tallgrass Energy GP, LP, the parent company of Tallgrass Energy Partners, LP (Ba2 stable).

The agency said the change in outlook reflects the negative impact on Enagas's business risk profile; that Enagas's investment, while diversifying earnings, will reduce the predictability of overall cash flows; the expected modest deterioration in financial metrics; and the erosion of financial flexibility to accommodate, for example, further acquisitions or operational under-performance at the current rating level.

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