TEXT - S&P comments on EQT Corp
Dec 20 - Standard & Poor's Ratings Services said today that its ratings on Pittsburgh-based EQT Corp. (BBB/Stable/A-2) will remain unchanged following the company's announcement that it has entered into an agreement to sell its natural gas distribution business (Equitable Gas Co. LLC) to Peoples Natural Gas. Under the terms of the agreement, EQT will receive approximately $720 million in cash and midstream assets that generate at least approximately $40 million of EBITDA per year. The transaction is subject to several levels of regulatory review which the company anticipates completing by the end of 2013. We anticipate that the loss of the gas utility assets will result in a modest deterioration in our assessment of the company's business risk profile. While we have historically viewed these assets as having an excellent strong standalone business risk profile, they have been a modest contributor to the company's consolidated cash flows, typically representing around 10% of consolidated earnings. Upon completion of the transaction, it is likely that we will apply a slightly more conservative standard in evaluating the company's credit protection measures as an offset to our slightly diminished view of the company's business risk profile. Nonetheless, our projections of the company's future financial performance suggest that the company will be able to preserve credit protection measures at levels consistent with current ratings following the closing of the transaction.