UPDATE: Jefferies Initiates Coverage on El Paso Pipeline Partners LP on Balanced Risk/Reward Profile

In a report published Wednesday, Jefferies analyst Christopher Sighinolfi initiated coverage on

with a Hold rating and $44.00 price target. In the report, Jefferies noted, “EPB boasts a diverse portfolio of fee-based US natural gas assets, an IG-rated balance sheet, positive coverage, 21 consecutive quarterly distribution raises, and potentially ~$2B of additional drop-downs. However, maintenance capex & distribution coverage have sharply declined following the EP/KMI merger, and 2Q 10-Q comments introduce doubt about future drop-downs. We believe EPB's risk/reward profile is balanced and are initiating with a Hold.” El Paso Pipeline Partners LP closed on Tuesday at $41.73.