March 20, 2012 / 3:42 PM / 6 years ago

TEXT-S&P rates Colonial Gas notes 'A-'

March 20 - Standard & Poor's Ratings Services today assigned its 'A-' rating
to Colonial Gas Co.'s $25 million 3.296% senior notes, series A, due March 15,
2022, and its $25 million 4.628% senior notes, series B, due March 15, 2042.	
	
The ratings on Colonial Gas (A-/Stable/--) are based on the consolidated 	
credit profile of its ultimate parent, U.K.-based National Grid PLC (NG PLC). 	
Colonial Gas is a gas distribution company serving about 194,000 customers in 	
northwest Boston and in Cape Cod. The company is a wholly owned subsidiary of 	
KeySpan Corp., which is in turn a subsidiary of U.S.-based utility holding 	
company National Grid USA, a wholly owned subsidiary of NG PLC.. National
Grid USA is also a subsidiary of intermediate holding company National Grid 	
Holdings Inc.	
	
The ratings on NG PLC and its subsidiaries reflect our view of the strong and 	
predictable cash flows from the group's low-operating-risk electricity and gas 	
network operations in the U.K. and the U.S.; regulatory regimes in each of 	
those countries that we consider to be broadly supportive of credit quality; a 	
consistently applied strategic and financial policy; and a proven track record 	
of managing large acquisitions. These strengths are offset by NG PLC's 	
relatively high financial leverage; a substantial capital expenditure program 	
and unchanged dividend policy that together will likely result in negative 	
free cash flows over the medium term; regulatory reset risk in the U.S. and 	
the U.K.; and exposure to foreign exchange risks and inflation, which add 	
volatility to Standard & Poor's-adjusted credit measures.	
	

RELATED CRITERIA AND RESEARCH	
     -- Liquidity Descriptors For Global Corporate Issuers, Sept. 28, 2011	
     -- Principles Of Credit Ratings, Feb. 16, 2011	
     -- Use Of CreditWatch And Outlooks, Sept. 14, 2009	
     -- Business Risk/Financial Risk Matrix Expanded, May 27, 2009	
     -- Analytical Methodology, April 15, 2008	
     -- Assessing U.S. Utility Regulatory Environments, Nov. 7, 2007	
	
RATINGS LIST	
	
Colonial Gas Co.	
 Corporate Credit Rating                                       A-/Stable/--	
	
New Rating	
	
Colonial Gas Co.	
 Senior Unsecured	
  $25 Mil. 3.296% Senior Notes, Ser A, Due March 15, 2022      A-	
  $25 Mil. 4.628% Senior Notes, Ser B, Due March 15, 2042      A-	
	
	
Complete ratings information is available to subscribers of RatingsDirect on 	
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 	
by this rating action can be found on Standard & Poor's public Web site at 	
www.standardandpoors.com. Use the Ratings search box located in the left 	
column.

Our Standards:The Thomson Reuters Trust Principles.
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