TEXT- Moody's rates Tokyo Gas's Japan bonds Aa1

(The following statement was released by the rating agency)

May 15 - Moody's Investors Service has assigned Aa1 long-term ratings to Tokyo Gas Co. (9531.T: Quote, Profile, Research), Ltd.'s (Tokyo Gas) Yen 20 billion bonds due 2015. The rating outlook is stable.

The ratings recognize Tokyo Gas' prominent franchise supported by its effective control of the gas supply and distribution network in the Greater Tokyo Metropolitan Area, and the stability of earnings.

The ratings further incorporate the implications of progressing liberalization of Japan's gas market. Given the significant entry barriers to Japan's gas market, Tokyo Gas has an effective monopoly to serve a substantial part of the Greater Tokyo Metropolitan Area - Japan's most important economic region.

Consequently, it plays a significant role in the national economy, meaning it is highly likely to receive strong regulatory and government support if, and when, required. The Japanese government is gradually changing its traditionally protective policy toward the gas industry and starting to relax controls through steadily expanding the size of the unregulated market.

It is also encouraging competition to lower rates. However, Moody's does not anticipate the consequent emergence of any serious threats to Tokyo Gas' strong franchise, and the company should maintain its strong credit profile.

Moody's will continue to assess how the authorities implement further deregulation and how the resultant pressures affect the company's operations and credit quality.

Tokyo Gas Co., Ltd., headquartered in Tokyo, is Japan's largest gas company in sales terms.