Moody’s Cuts El Paso Credit Rating to ‘Junk’
From Bloomberg News
El Paso Corp. had credit ratings on $25 billion of debt cut to “junk” by Moody’s Investors Service on concern the company must sell assets to make up a cash shortfall and may incur more costs to exit energy trading.
The downgrade will trigger calls by lenders for more collateral for its energy-trading business, El Paso said. Failure to keep an investment-grade rating may force El Paso to expand asset sales that so far this year exceed $2.7 billion.
The rating on El Paso’s senior unsecured debt was cut to Ba2, the third-highest rating below investment grade, from Baa3, the lowest investment-grade rating, Moody’s said.
Shares of El Paso fell $2.05, or 19.2%, to $8.63 on the New York Stock Exchange.
