It might have been a coincidence, but it really shouldn’t have been. On May 26, Standard & Poor’s said it would downgrade the credit rating of Energy Transfer Equity (NYSE: ETE) by two notches should the midstream giant complete its disputed merger with Williams (NYSE: WMB). That would almost certainly force Energy Transfer to slash its distribution, based on prior statements by management.

Two days later, Reuters reported that Williams, currently headed for a June 20 trial against Energy Transfer over a variety of mutual recriminations over the merger, has at long last signaled its willingness to negotiate over the pending deal’s $6 billion cash component, which is what has the credit raters bent out of shape.

The only surprise is that the overture, if genuine, didn’t happen earlier, since worries over the cash outlay, resulting credit downgrades and distribution cuts have driven down the value of Williams alongside that Energy Transfer.

Perhaps the approach of the trial date and the merger deadline the following week is concentrating minds. Or perhaps it’s just another misleading trial balloon along the lines of this one floated via Bloomberg back in January.

Our position remains the same it’s been all along: that there’s a win-win deal to be hammered out that would dramatically revalue both equities, which for better or worse remain linked while merger hopes live. That presumes sufficient goodwill  can be mustered, no sure bet amid the ongoing acrimony.

Without a new deal, the long-term value proposition remains but in the near term the ride is likely to stay rocky in the event of a distribution cut.

Growth pick ETE remains our #1 Best Buy below $15; WMB is a Buy below $23 in the Growth Portfolio.