Fitch could lift Spectra Energy

Fitch Ratings said it placed Spectra Energy Capital, LLC's ratings on Rating Watch Positive following the announcement that Enbridge Inc. (unrated) will acquire Spectra Energy Corp. in a stock-for-stock transaction that will create the largest energy infrastructure company in North America, with C$165 billion ($127 billion) combined enterprise value.

The agency rates Spectra Energy Capital’s long-term issuer default rating and senior unsecured rating BBB and short-term issuer default rating and commercial paper F2.

Fitch said it views the acquisition as favorable for Enbridge and Spectra. The combination of companies creates the largest energy infrastructure company in North America in a business where size and scale are significant credit factors.

The combined companies will have increased geographic and business line diversity, as well as, a strong backlog of growth spending opportunities which should provide significant earnings and cash flow growth, the agency explained.

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