S&P: Green Mountain on watch

Standard & Poor's said it placed the ratings on Green Mountain Power Corp., including the BBB corporate credit rating, on CreditWatch with developing implications.

The company is owned by Northern New England Energy Corp., a wholly owned subsidiary of Gaz Metro.

The action follows news by Gaz Metro, through Northern New England Energy, of an offer to purchase all the common equity of Central Vermont Public Service Corp. for $35.25 per share. The bid is higher than Fortis Inc.'s previously announced offer of $35.10 per share.

The proposed acquisition will be financed with roughly 50% equity and 50% of debt. The incremental debt is expected to be housed at Gaz Metro or Northern New England Energy, S&P said.

The transaction also includes assumption of $230 million of Central Vermont's debt, the agency said.

Green Mountain's ratings are loosely linked to those on Gaz Metro, the agency said.

Depending on the level of support Gas Metro is willing to provide to the combined entity, S&P said it could raise the rating on Green Mountain to that of Gaz Metro on completion of the merger.

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