El Paso Corp., the nation's largest natural gas pipeline company, said Friday it sold a subsidiary and other assets to TransCanada Corp. and TC PipeLines LP for about $3.39 billion.
The two companies will also assume a total of $744 million in debt. Houston-based El Paso said it expects proceeds of roughly $3.3 billion from the sale of ANR Pipeline Co., its Michigan storage assets and a 50 percent stake in Great Lakes Gas Transmission.
Shares of El Paso rose 85 cents, or almost 6 percent, to $15.67 in morning trading on the New York Stock Exchange.
Doug Foshee, El Paso's president and chief executive officer, called the sale a "transformational event" that will help boost the company's credit rating, which suffered under too much debt as the company grew.
"Coupled with the restructuring efforts over the last three years, this transaction immediately elevates our credit statistics to a level that is at or very near an investment grade level, one of our primary long-term objectives," Foshee said in a statement.
El Paso anticipates about $1 billion in tax loss carry-overs to remain after the close.
TC Pipelines said it acquired 46.5 percent of Troy, Mich.-based Great Lakes Gas Transmission for $750 million and assumed an $212 million in debt.
The deal is expected to close in the first quarter of 2007.
