Moody's cuts NUI ratings

Moody's Investors Service said it lowered the senior unsecured debt ratings of NUI Utilities Inc. to B1 from Ba3 and that of NUI Corp., the parent, to Caa1 from B3.

The outlook for both entities is negative.

Moody's said the action reflects the company's recent announcements that it expects to register lower earnings in the first quarter of fiscal 2004 due to severance costs and expenses related to its debt refinancings concluded last November with a new group of lenders at substantially higher rates of interest and fees.

The ratings also reflect the continued delay in producing audited fiscal 2003 financials and a first quarter 2004 10-Q, because of continuing investigations by the audit committee of the NUI board of directors of certain questionable transactions of NUI Energy Brokers Inc., the company's wholesale energy trading subsidiary, which will require additional waivers from lenders of both NUI Utilities and NUI Corp.

Moody's said the downgrade also reflects the expectation of having to incur a meaningful settlement charge as result of the New Jersey Board of Public Utilities' Focused Audit on NUI Corp., which would have the effect of reducing its reportable income and equity for fiscal 2003 results, the investigation of the New Jersey attorney general's office into NUI Energy Brokers and the delays in realizing the sale of the company which is the source of repayment for NUI Corp.'s $255 million in rated debt and a portion of the debt of NUI Utilities.

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