Duff and Phelps said it lowered itsratings on outstanding notes and debentures of Transco Energy
Company and its subsidiary Transcontinental Gas Pipe Line
Company, affecting 887 mln dlrs in debt securities.
    Transco Energy cumulative convertible preferred stock was
lowered to DP-12 (middle BB) from DP-10 (low BBB) and
Transcontinental Gas Pipe Line notes and debentures were
lowered to DP-10 from DP-8 (high BBB) and preferred stock to
DP-11 (high BB) from DP-9 (middle BBB).
    Duff and Phelps said the downgrade reflects an increase in
Transco's estimate of payments it will require to settle
take-or-pay liabilities from 550 mln dlrs to 900 mln dlrs.
Transco has already made more than 400 mln dlrs in cash
payments.
    In addition, natural gas remains in excess supply and the
ability of Transcontinental to keep its pipeline full is
subject to increaseing competition.
                   
 Reuter
