Standard & Poor's and Moody's Revise Outlook on Southern Star
OWENSBORO, Ky., Aug. 24 /PRNewswire/ -- Two prominent ratings agencies, Standard & Poor's (S & P) and Moody's, recently upgraded the outlook on Southern Star (Company) from "stable" to "positive." This change was the result of recent reviews of the Company's financial position. It was the first change in the Company's ratings since 2006.
In their July 20, 2010 release, S & P noted their revisions were due to the "company's excellent business profile" and "improved credit metrics" as a result of a 2009 rate case decision. Moody's noted in their August 13, 2010 release that the Company could be upgraded over the next 12 to 18 months based on maintaining its financial performance, including Funds from Operations (FFO) interest coverage in the low 3X range, and FFO to debt in the mid-teens.
"Our expectation of financial performance is predicated on the stability of the pipeline's relationships and the continuation of the sponsors' credit supportive financial policies," said Moody's vice president Mihoko Manabe.
According to Susanne Harris, Southern Star Vice President of Finance and CFO, "Improving credit metrics, stable and predictable cash flows, ready access to gas supplies, long-standing customer relationships, and high-quality customer credit profiles were key considerations in the agency's outlook revision."
"We are extremely pleased that both S & P and Moody's have revised their outlooks on Southern Star to positive from stable," said Southern Star President and Chief Executive Officer Jerry Morris. He further added, "This is a testimony to the hard work and dedication of our workforce and leadership to stay the course with our business plan, strategies, and goals, as well as the continued support of our owners/sponsors."
About Southern Star Central Corp.
Southern Star Central Corp., headquartered in Owensboro, Kentucky, owns Southern Star Central Gas Pipeline, Inc. an interstate natural gas transmission system spanning approximately 6,000 miles in the Midwest and Mid-continent regions of the United States. Southern Star's pipeline facilities are located throughout Kansas, Oklahoma, Nebraska, Missouri, Wyoming, Colorado and Texas. It serves major markets such as the Kansas City metropolitan area, Wichita, Kansas and the Joplin/Springfield, Missouri areas.
The information in this release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to anticipated financial performance, management's plans and objectives for future operations, business prospects, outcome of regulatory proceedings, market conditions and other matters. Words such as "anticipate," "believe," "estimate," "expect," "intend," "plan" and "objective" and other similar expressions identify some of the statements that are forward-looking. These statements are based on management's beliefs and assumptions and on information currently available to management. Actual results could differ materially from those contemplated by the forward-looking statements. In addition to any assumptions and other factors referred to specifically in connection with such statements, factors that could cause actual results to differ materially from those contemplated in any forward-looking statement include, among others, the following: future utilization of pipeline capacity, which can depend on energy prices and the prices for natural gas available on Central's system, competition from other pipelines and alternative fuels, the general level of natural gas demand, decisions by customers not to renew expiring natural gas transportation contracts, adequate supplies of natural gas, the construction or abandonment of gas customer facilities, weather conditions and other factors beyond Central's control; operational risks and limitations of Central's pipeline system and of interconnected pipeline systems; changes in federal, state or local laws and regulations to which Central is subject, including allowed rates of return and related regulatory matters, and tax, environmental and employment laws and regulations; the ability of Central's customers to pay for its services; the ability to obtain governmental and regulatory approval of various expansion projects; the cost and effects of legal and administrative proceedings; the effect of accounting interpretations and changes in accounting policies; and changes in general economic, market or business conditions.
Other factors and assumptions not identified above may also have been involved in deriving these forward-looking statements, and the failure of those other assumptions to be realized, as well as other factors, may also cause actual results to differ materially from those projected. Central assumes no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking statements.
SOURCE Southern Star Central Corp.
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