Southern Star Central Gas Pipeline, Inc. -- Moody's announces completion of a periodic review for a group of Natural Gas Pipelines and Midstream issuers

Announcement of Periodic Review: Moody's announces completion of a periodic review for a group of Natural Gas Pipelines and Midstream issuersGlobal Credit Research - 10 Aug 2022New York, August 10, 2022 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings -and other ratings that are associated with the same analytical units for the rated entity(entities) listed below.The review was conducted through a portfolio review discussion held on 3 August 2022 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. A possible outcome from periodic reviews is a referral of a rating to a rating committee.This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement.Key Rating ConsiderationsThe principal methodology used for the rated entities listed below was Natural Gas Pipelines published in July 2018. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.Natural Gas PipelinesRevenue Generation and Recovery Cost Framework: Metrics may include but are not limited to monopoly status; rate setting flexibility; strength of customer base and service area as measured by resource base, population, wealth, economic diversity, and growth projections; length and quality of customer contracts and contractor credit quality; scale; market framework and market diversification; structural and creditor protections; and ownership model.Cost Recovery: Metrics may include but are not limited to transparency and timeliness of rate setting process by governing board or regulatory body including support for setting appropriate rates and charges to service debt; exposure to potential rate shocks; cash flow predictability.Generation and Procurement Risk: Metrics may include but is not limited to ability to meet power supply commitments; the fuel mix; power price hedging; the diversity, cost and reliability of power supply sources; exposure to additional debt needs or regulatory risk; scale and complexity of the capex programme.Competitiveness: Metrics may include but are not limited to market position, average system retail rate relative to regional peers or state average and material cost pressure that could lead to higher rates.Financial Position, Policy and Ownership: Metrics may include but are not limited to corporate financial policy, days cash on hand; debt service coverage ratio measured by debt service and other fixed charges by net revenue, adjusted debt ratio of debt and ANPL (adjusted net pension liability) to net assets and working capital; ratio of debt to cash flow; interest coverage metrics and debt to asset metrics. Assessments may include but are not limited to an Issuer's desired capital structure / credit profile, and its adherence to its commitments and our views on the ability of the company to achieve its targets, an assessment of the likelihood and potential negative impact of M&A or other types of balance-sheet-transforming events, and the likelihood of uncontracted financial support being provided by owners; and the protective terms of debt documentation including but limited to restrictions on business activities, use of debt and revenue distributions; and control and liquidity afforded to creditors.• ANR Pipeline Company• Columbia Pipeline Group, Inc.• Gas Transmission Northwest LLC• Gulfstream Natural Gas System L.L.C.• Iroquois Gas Transmission System, L.P.• NOVA Gas Transmission Ltd.• Sabal Trail Transmission, LLC• Southeast Supply Header, LLC• Southern Star Central Corp.• Texas Eastern Transmission L.P.The principal methodology used for the rated entities listed below was Midstream Energy published in February 2022. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.Midstream EnergyScale: Size is a consideration because it typically plays an important role in gauging the credit strength of a midstream company, because it influences many of the core attributes that drive its resiliency to stress. These attributes may include, among other aspects, operational and financial flexibility, economies of scale, and the breadth of a company's product and service offerings, customers, and market reach. Scale is measured using net PP&E and EBITDA.Business Profile: The business profile of a midstream energy company's asset portfolio has a large influence on its ability to generate operating cash flow and on the stability and sustainability of those flows. In turn, cash flow stability extensively drives credit risk in the sector, owing to issuers' significant debt service obligations and the high distribution payouts they typically make. Different types of business operations within the midstream sector are affected by varying degrees of business risk. Operating assets characterized by low exposure to commodity price and volume risk, such as interstate refined products, natural gas, or crude oil pipelines, tend to show predictable and stable long-term cash flow generation. Conversely, midstream companies that have expanded into upstream or downstream businesses may operate assets that entail relatively high exposure to commodity price and volume risk, making consistent cash flow stability less easily achievable. Business profile evaluation is based on a forward-looking qualitative assessment of an issuer's estimated price and volume risk exposure, and the stability afforded by its contracts and market position.Leverage and Coverage: Leverage and coverage measures are indicators of a company's financial flexibility and long-term viability, including its ability to adapt to changes in the economic and business environments in the segments in which it operates. Maintaining financial flexibility is crucial for midstream MLPs given their heavy reliance on external sources of capital, and investors in the sector generally have expectations of high payouts. Indicators of leverage and coverage include ratios such as: Debt/ EBITDA, EBITDA/ Interest Expense, and (FFO – Maintenance Capital Expenditures)/ Distributions.Financial Policy: Management and board tolerance for financial risk is considered because it directly affects debt levels, credit quality, and the risk of adverse changes in financing and capital structure. Financial risk tolerance serves as a guidepost to investment and capital allocation. Liquidity management is also an important aspect of overall risk management and can provide insight into risk tolerance.Other Rating Considerations: Such factors include financial controls and the quality of financial reporting; corporate legal structure; the quality and experience of management; assessments of corporate governance as well as environmental and social considerations; exposure to uncertain licensing regimes; and possible government interference in some countries. Regulatory, litigation, liquidity, technology, and reputational risk as well as changes to consumer and business spending patterns, competitor strategies and macroeconomic trends also affect ratings. • Enbridge Inc. • TC Energy Corporation This announcement applies only to Rated Entities with EU rated, UK rated, EU endorsed and UK endorsed ratings. 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