TransCanada PipeLines Limited 6.250% Junior Subordinated Notes due 2085 (TCPA)

On our desk, we are closely tracking the stability of TC Energy and its subsidiary TransCanada PipeLines Limited following the recent rating confirmations from Fitch and Morningstar DBRS. With Fitch holding the junior subordinated debt at 'BBB-' and Morningstar DBRS confirming ratings with stable trends, the market sentiment feels very secure. We are advising clients to look past minor daily equity fluctuations—such as the recent tick down to $21.80—and focus on the strong take-or-pay long-term contracts underpinning these cash flows.

Watching the recent 52-week range for TCPA between $22 and $25, our quantitative models show low volatility relative to broader energy sector debt. The affirmation of TCPL's Long-Term IDR at 'BBB+' by Fitch provides a solid floor for market confidence. Fixed-income desks are viewing these subordinated notes as a reliable yield component, especially given the disciplined financial updates coming out of the 2026 MDandA reports.

From a risk management standpoint, the structural protection of TransCanada PipeLines Limited's junior subordinated notes is bolstered by parent company TC Energy's diversified, regulated asset base. However, our desk notes that regional exposures, specifically in Mexico, continue to warrant cautious monitoring. As long as disciplined financial policy and deleveraging plans remain intact, the risk-reward profile for these long-dated instruments stays well-anchored within the stable rating outlook.

Analyzing the recent filings, including the details around US$1 billion junior subordinated note issuances and subsequent credit reviews, our credit research group highlights that TCPL's short-term IDR at 'F2' and commercial paper ratings reinforce robust liquidity management. This creates a reassuring cushion for longer-duration notes maturing out to 2085, mitigating immediate liquidity concerns despite macroeconomic headwinds.

In our portfolio strategy meetings, market participants are weighing the implications of TC Energy's overall financial policy. While concerns regarding Mexico exposure are acknowledged in recent company notes, the market consensus is that disciplined execution of their deleveraging strategy easily offsets these operational risks. The stable trend maintained across both Fitch and Morningstar DBRS ratings validates this defensive positioning.