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Moody’s could drop AGL Capital
Moody's Investors Service said it placed the A3 senior unsecured long-term rating of AGL Capital Corp. on review for downgrade.
At the same time, the agency affirmed the ratings of Northern Illinois Gas Co. with a stable outlook.
This action is based on the anticipated debt financing of large upcoming capital investments resulting in weaker credit metrics at AGL Resources Inc. (AGL, unrated), the sole guarantor of AGL Capital debt.
"The review of AGL Capital's rating is prompted by the anticipated additional debt to be issued to fund AGL's planned capital investments. A large portion of the debt is expected to support three major natural gas pipeline investments, which will not generate any cash or earnings until they are placed in service. Thus, we expect AGL's credit metrics to weaken until these pipelines are completed," Moody’s analyst Jairo Chung said in a news release.
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