S&P lifts Energy East to A-

Standard & Poor's said it raised the ratings on Energy East Corp. to A- from BBB+ upon the announcement by its parent company, Iberdrola SA (A-/stable/A-2), that it is assuming Energy East's debt.

The agency also raised the ratings on Energy East subsidiaries Connecticut Natural Gas Co. and Southern Connecticut Gas Co. to A- from BBB+, lowered the ratings on Rochester Gas & Electric Corp. to BBB from BBB+ and affirmed the ratings of New York State Gas & Electric Corp., Central Maine Power Co. and Berkshire Gas Co.

All the ratings were removed from CreditWatch with negative implications, where they were placed on Jan. 29, and the outlook is stable.

For ratings purposes, the U.S. utilities are now regarded as effectively under Iberdrola's direct control. S&P said that none individually is a significant source of cash flow for the utility holding company, and the ratings are now based largely on each utility's standalone credit profile up to the existing A- Iberdrola rating.

The European company's U.S. guarantee does not extend down to the utility level. Despite being relieved of the burden, from a ratings perspective, of servicing the holding company debt, some of the separate utility credit profiles do not warrant an upgrade or, in the case of Rochester, an affirmation, the agency said. Both it and New York State Gas were recently denied expedited rate relief in New York.

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