S&P: Transwestern Pipe developing

Standard & Poor's said the BB rating on Transwestern Pipeline Co. remains on CreditWatch with developing implications after the announcement of the proposed sale of Transwestern's direct parent, CrossCountry Energy LLC, to a joint venture of Southern Union Co. (BBB/negative/--) and General Electric Capital Corp. (AAA/stable/A-1+).

Until S&P gains more understanding about the details of the proposed sale, its affect on Transwestern's credit quality is uncertain, the agency said.

S&P said the formation of CrossCountry as a separate, reorganized holding company concentrating on operating natural gas pipeline assets was viewed as an affirmative step toward establishing the independence of the pipeline operations from Enron Corp. On the resolution of the CreditWatch listing, the rating on Transwestern should be based on the credit profile of its ultimate owner, unless steps are taken to insulate the pipeline company.

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