DBRS Upgrades Kinder Morgan, Inc., Downgrades Kinder Morgan Energy Partners, L.P., Removes Ratings from Under Review, Trends Stable

DBRS Limited (DBRS) has today upgraded the Issuer Rating and Senior Notes and Debentures rating of Kinder Morgan, Inc. (KMI) to BBB (low) from BB. DBRS has concurrently downgraded the Medium-Term Notes & Unsecured Debentures rating of Kinder Morgan Energy Partners, L.P. (KMP) to BBB (low) from BBB (high). All ratings have Stable trends. At the same time, DBRS has discontinued the Issuer Rating of KMP and the Recovery Rating for KMI. The rating actions follow the closing of the merger whereby KMI has consolidated its subsidiaries under a single corporate structure by acquiring all of the outstanding equity securities of KMP, Kinder Morgan Management, LLC and El Paso Pipeline Partners LP. All ratings have now been removed from Under Review where they were placed when the merger was announced (see DBRS press release dated August 11, 2014, for more details).

KMI’s new simplified corporate structure provides for cross guarantees among KMI, KMP and substantially all domestic wholly owned operating subsidiaries creating a pari passu creditor class and eliminating the structural subordination that existed at KMI. DBRS notes that KMI’s business risk profile has remained unchanged and is supported by a well-diversified energy infrastructure portfolio of regulated oil, liquids and natural gas pipeline operations. DBRS expects the Company to fund its free cash flow deficits driven by the Company’s high dividend policy and aggressive capital expenditure program with a prudent mixture of equity and debt, and maintain leverage reasonable for the BBB (low) rating category.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

The applicable methodologies are Rating Pipeline and Diversified Energy Companies (January 2014) and DBRS Criteria: Guarantees and Other Forms of Explicit Support (July 2013), which can be found on our website under Methodologies.