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What: January was an awful month for Energy Transfer Equity (NYSE:ETE) with the market growing increasingly worried about its ability to close its deal for Williams Companies (NYSE:WMB). On top of that, concern about the credit quality of both companies grew after Williams' credit rating agency downgraded it below investment grade.

So what: In early January Moody's downgraded Williams Companies' credit rating below investment grade while lowering Energy Transfer Equity's outlook from positive to stable. It downgraded Williams because of its concern that the company's financial leverage won't decline enough to support its existing ratings due to the current challenging operating environment. Meanwhile, with Energy Transfer seeking to acquire Williams it will acquire its problems, which is why its outlook has been lowered.

That said, investors aren't so sure the deal will even go through after a number of reports surfaced that said the deal was in trouble. Further, other reports surfaced that the deal might need to be renegotiated. One reason for these concerns is the $6 billion in cash that Energy Transfer would pay Williams investors because it needs to take on additional debt to fund that payment, which isn't ideal given the credit concerns.

Williams' board, however, did affirm the deal in its agreed-upon form saying that it was "unanimously committed" to move forward with the acquisition. Energy Transfer Equity, likewise, was reported to also be committed to moving forward with the transaction.

Now what: Both companies will likely continue to be volatile, even if the deal closes without changes. That's because the market is just as worried about the credit quality of both companies in light of the continued downturn in the energy market. Until those fears abate, investors will remain cautious.

Matt DiLallo has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.