Moody's may upgrade Williams

Moody's Investors Service said it placed the Williams Cos., Inc.'s ratings, including the Ba2 corporate family rating, under review for possible upgrade following the company's announcement that it plans to sell substantially all of its merchant power generation operations.

The agency also placed the ratings of Williams' natural gas pipeline subsidiaries under review for possible upgrade, including Williams Gas Pipeline Co., LLC, Transcontinental Gas Pipe Line Corp. and Northwest Pipeline Corp.

The review for upgrade reflects the positive benefits Williams will receive from exiting its power business, Moody's said, which include improved leverage and lower volatility of cash flow and earnings. In addition to the power sale, the agency's review will evaluate Williams' fundamental operating and financial metrics and near-term trends in its core natural gas businesses.

The power sale should close in the next six months. Assuming Williams disposes of substantially all its power obligations, the agency expects the review to result in a one-notch upgrade.

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