Moody's cuts AGL outlook to negative

Moody's Investors Service changed the rating outlooks for AGL Resources to negative from stable and affirmed the ratings of AGL Resources Inc. (prospective Baa1 senior unsecured shelf rating) and its subsidiaries following the announcement that AGL has entered into a purchase and sale agreement to acquire the stock of NUI Corp. (Caa1 senior unsecured).

Looking over a time horizon of the next 18 to 24 months, Moody's said the negative outlook reflects the formidable execution risks in consummating, financing and integrating this transaction.

If the transaction were to be consummated, Moody's said the negative outlook indicates the execution risk in issuing a sufficient amount of equity at around the closing so as to mitigate the increase in leverage.

The negative outlook denotes Moody's expectation that the strains in AGL's credit profile will be temporary and recover over an 18 to 24 month time horizon.

Moody's affirmed AGL Resources' Baa2 subordinated rating and its prospective Baa1/prospective Baa2, prospective Baa3 shelf rating, AGL Capital Trust's Baa2 trust preferred rating, AGL Capital Trust II's Baa2 trust preferred rating and AGL Capital Trust III's prospective Baa2 trust preferred shelf rating.

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