Moody's rates UIL notes Baa3

Moody's Investors Service said it assigned a provisional Baa3 rating to UIL Holdings Corp.'s shelf registration for prospective issuance of senior unsecured debt and a Baa3 rating to the company's proposed offering of $450 million of notes. Moody's also said it affirmed its issuer rating at Baa3 and the existing ratings for its utility subsidiary, the United Illuminating Co., including the Baa2 issuer rating and the Baa2 rating for all of its senior unsecured pollution control revenue refunding bonds.

The outlook is stable.

The ratings take into account that UIL is advancing plans to acquire Southern Connecticut Gas Co., Connecticut Natural Gas Co. and Berkshire Gas Co., all local gas distribution subsidiaries of Iberdrola USA, which is a subsidiary of Iberdrola SA.

The ratings consider the relatively conservative funding strategy being used by UIL, Moody's said.

The ratings also reflects the increase in size, scale and scope of consolidated regulated utility operations and anticipated cost savings that would likely materialize as the companies come under UIL's ownership, the agency said.

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