Moody’s moves TGI outlook to negative

Moody’s Investors Service said it revised the outlook for Transportadora de Gas Internacional to negative from stable and affirmed its Baa3 foreign-currency senior unsecured rating.

“TGI's rating outlook change to negative from stable reflects (a) the potential financial deterioration from the regulatory changes being implemented by the energy regulator in Colombia, Comision de Regulacion de Energia y Gas (CREG), (b) the company's lower weighted average gas transport contract life, and (c) the uncertainty stemming from the government attempts to further interfere in the gas sector,” the agency said in a press release.

CREG revised tariff indexation to Colombian pesos from U.S. dollars and lowered the asset value recognized in the tariff formula after the 20-year regulatory useful life. This revision adds to TGI’s foreign-exchange volatility, the agency said.

Additionally, Moody’s noted CREG did implement changes that will benefit the company. “However, the overall impact of the current regulatory cycle will be negative to TGI.”

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