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NEW YORK--([ BUSINESS WIRE ])--Fitch Ratings has assigned the 'AAA' rating to the senior unsecured notes and 'AA' rating to the mandatory redeemable preferred shares (MRPS) issued by Tortoise Pipeline & Energy Fund (NYSE: TTP), a closed-end fund managed by Tortoise Capital Advisors, LLC (Tortoise).

Fitch rates the following:

--$10,000,000 Floating Rate Senior Notes, Series A, due Dec. 15, 2016 'AAA';

--$17,000,000 2.50% Senior Notes, Series B, due Dec. 15, 2014 'AAA';

--$6,000,000 3.49% Senior Notes, Series C, due Dec. 15, 2018 'AAA';

--$16,000,000 4.08% Senior Notes, Series D, due Dec. 15, 2021 'AAA';

--$16,000,000 4.29% MRPS, Series A, redemption date Dec. 15, 2018 'AA'.

KEY RATING DRIVERS

The ratings are based on asset coverage provided to the senior unsecured notes and MRPS by the fund's portfolios, structural protections afforded by mandatory deleveraging provisions in the event of asset coverage declines, the legal and regulatory parameters that govern the fund's operations and the capabilities of Tortoise as investment advisor.

LEVERAGE

The fund commenced its operations on Oct. 31, 2011 with $238.3 million in net assets. The fund has no prior leverage.

ASSET COVERAGE

As of Oct. 31, 2011, the fund's pro-forma asset coverage ratio for senior unsecured notes, as calculated in accordance with the Investment Company Act of 1940 (1940 Act), was in excess of 300%, which is the minimum asset coverage required by the 1940 Act. Also, at the same time, the fund's pro-forma asset coverage ratio, as calculated in accordance with the Fitch overcollateralization test per the 'AAA' rating guidelines outlined in Fitch's applicable criteria was in excess of 100%, which is the minimum asset coverage deemed consistent with an 'AAA' rating.

In addition, the fund's pro-forma asset coverage ratio for total outstanding MRPS, as calculated in accordance with the Investment Company Act of 1940, was in excess of 200%, which is the minimum asset coverage level required by the 1940 Act with respect to preferred stock. The fund's pro-forma asset coverage ratio, as calculated in accordance with the Fitch overcollateralization test per the 'AA' rating guidelines outlined in Fitch's applicable criteria was in excess of 100%, which is the minimum asset coverage deemed consistent with an 'AA' rating.

Should the asset coverage tests of either the senior notes or the MRPS decline below their minimum threshold amounts and are not cured in a pre-specified timeframe, the governing documents require the fund to reduce the leverage in a sufficient amount to restore compliance with the applicable asset coverage tests.

FUNDS PROFILE

The fund is a newly organized non-diversified closed-end investment management company with an investment objective to provide stockholders a high level of total return, with an emphasis on current distributions. The fund seeks to provide stockholders an efficient vehicle to invest in a portfolio consisting primarily of equity securities of pipeline and other energy infrastructure companies.

The fund intends to focus primarily on pipeline companies that engage in the business of transporting natural gas, natural gas liquids, crude oil and refined petroleum products, and to a lesser extent, on other energy infrastructure companies. Under normal circumstances, the fund will invest at least 80% of its total assets in equity securities of pipeline and other energy infrastructure companies.

The fund may invest up to 30% of its total assets in unregistered or otherwise restricted securities, primarily through direct investments in securities of listed companies and may also invest up to 25% of its total assets in securities of master limited partnerships. The fund will also seek to provide current income from gains earned through an option strategy which will consist of writing (selling) covered call options on equity securities in our portfolio.

THE ADVISOR

Tortoise, a wholly owned subsidiary of Tortoise Holdings, LLC, is the fund's investment adviser, responsible for the fund's overall investment strategy and its implementation. The advisor was formed in October 2002 and, as of Oct. 31, 2011 had approximately $7.2 billion in assets under management.

Montage Asset management, LLC, a wholly-owned entity of Mariner Holdings, LLC owns approximately 61% of Tortoise Holdings, LLC, with the remaining interest held by Tortoise's five managing directors and certain other Tortoise employees.

RATING SENSITIVITY

The ratings assigned to the senior unsecured notes and MRPS may be sensitive to material changes in the credit quality or market risk profiles of the fund. A material adverse deviation from Fitch guidelines for any key rating driver could cause the rating to be lowered by Fitch. For additional information about Fitch closed-end fund ratings guidelines, please review the criteria referenced below, which can be found on Fitch's website at '[ www.fitchratings.com ]'.

Additional information is available at '[ www.fitchratings.com ]'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

The sources of information used to assess this rating were the public domain and Tortoise.

Applicable Criteria and Related Research:

--'Closed-End Fund Debt and Preferred Stock Rating Criteria' (Aug. 16, 2011).

Applicable Criteria and Related Research:

Rating Closed-End Fund Debt and Preferred Stock

[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=648840 ]

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