S&P rates TransCanada PipeLines notes A-

Standard & Poor's said it assigned an A- issue-level rating to TransCanada PipeLines Ltd.'s (A-/stable) $1 billion senior unsecured notes due Oct. 1, 2020.

Proceeds will be used to reduce the balance outstanding of commercial paper and the remainder should be sufficient to finance planned capital spending remaining in 2010 not supported by internally generated cash flow.

"The ratings on TCPL reflect our view of the predictable earnings stream from the company's natural gas pipeline operations and contracted power assets, and the high level and increasingly diverse sources of funds from operations that its operations generate," S&P analyst Nicole Martin said in a statement.

"We expect, however, the company will have materially negative free cash flow until 2012 given a very large multi-year capital expansion program," Martin added.

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