Q: Thoughts on today's announcement regarding TRP?
5i Research Answer:
The 40% sale of two US natural gas pipeline networks for $5.2B will allow TRP to meets its debt reduction goal ahead of schedule. A better balance sheet will help it achieve its goal of 3% annual dividend increases. That being said, the stock dropped because the value of the deal was lower than expected. CIBC dropped its rating to neutral. It will slow earnings growth somewhat, so it was a choice for the company between growth and leverage. We think it is an OK deal overall, but the stock may still drift on some uncertainty.