Fitch affirms El Paso

Fitch Ratings said it affirmed the ratings of El Paso Corp. and its subsidiaries, including El Paso's BB+ issuer default rating, BBB- $1.5 billion senior secured revolving credit facility due 2012, BB+ $500 million senior unsecured revolving credit facility due 2011, BB+ senior unsecured notes and debentures and BB- perpetual preferred stock.

The outlook is stable.

The agency said the affirmation is reflective of the strength of the company's interstate pipeline system franchise and the cash flow stability and lower business risk profile that goes along with its interstate pipeline portfolio, as well as the hedge positions and cost improvements at the company's upstream business.

El Paso is in the middle of a capital-spending plan that will significantly increase the size and scope of, primarily, its pipeline system. Fitch said this spending program will weigh on El Paso's metrics as the company works toward completing its significant project backlog, but the ratings consider the lower business risk, steady cash flow nature of the proposed pipeline projects and reflect the belief that once completed, the pipeline projects should provide adequate sustainable cash flow to support El Paso's debt levels.

Fitch expects El Paso's leverage on a consolidated basis to approximate 4.4 times in 2009.

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