Fitch reviews Southern, AGL

Fitch Ratings said it placed the A long-term issuer default rating and senior unsecured debt ratings of Southern Co. on Rating Watch Negative.

The actions follow the Aug. 24 announcement of a definitive agreement to acquire AGL Resources Inc. for $8 billion in cash.

Southern should benefit from the greater scale and diversity from the addition of predominantly low-risk natural gas distribution businesses, the agency said. However, these benefits will be partially offset by the increase in the company's near-term leverage given the primarily debt driven acquisition financing and a measured pace of deleveraging through 2019.

Fitch has also placed AGL's BBB+ long-term issuer default rating on Rating Watch Positive. The agency will likely maintain a one-notch differential between the issuer default ratings of Southern and AGL.

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