Moody's lowers Veresen view to negative

Moody's Investors Service said it changed Veresen Midstream LP's outlook to negative from positive.

The Ba3 corporate family rating, B1-PD probability of default rating and Ba3 (LGD 3) senior secured credit facilities were affirmed.

The outlook revision reflects the significantly weaker-than-expected cash flow driven by lower volumes through the natural gas processing facilities that will keep leverage highly elevated through 2020, Moody's said.

The ratings benefits from the continuing development of economic resources in the liquids-rich Montney by the Cutbank Ridge Partnership, a joint venture partnership between Encana Corp. and Mitsubishi Corp., the agency said.

The ratings also consider the company's solid contractual agreements mitigating all price and some volume risks on the partnership agreement, Moody's said.

The negative outlook reflects an expectation that leverage will remain at higher than 6.5x through 2020, the agency said.

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