Fitch affirms KeySpan

Fitch Ratings said it affirmed KeySpan Corp.'s issuer default rating and senior unsecured debt at A-. The ratings of its subsidiaries Brooklyn Union Gas Co. and KeySpan Gas East Corp. were also affirmed, including Brooklyn Union's A issuer default rating and A+ senior unsecured debt and KeySpan Gas East's A- issuer default rating and A senior unsecured debt.

The ratings were removed from Rating Watch negative, where they were placed on March 2, 2006, following the announcement that National Grid plc through National Grid USA agreed to purchase KeySpan for $7.3 billion and the assumption of $4.5 billion of debt, and the outlook is now stable.

The merger is expected to close shortly after Aug. 22 following the approval of a joint proposal by KeySpan, National Grid and Staff of the New York State Department of Public Service.

The agency said the affirmation and stable outlook are based on the fact that the historical operating performance for KeySpan and its subsidiaries has been stable, National Grid's track record in maintaining the credit quality of its acquired U.S. utility operations has been favorable, the joint proposal goes a long way to resolve rate issues for Brooklyn Union and KeySpan Gas East for the next five years and the post-merger structure ring-fences the New York utilities and, to a lesser degree, KeySpan from the other activities of National Grid.

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