S&P: Southern Union on watch

Standard & Poor's said it placed its BBB corporate credit rating on Southern Union Co. on CreditWatch with negative implications in response to the company's announced acquisition of Sid Richardson Energy Services Co. for $1.6 billion.

The company's other ratings include the senior secured debt at A-, senior unsecured debt at BBB and preferred stock at BB+.

S&P said the impact of the acquisition on the current rating will greatly depend on Southern Union's ability to mitigate the inherent business risks of gas processing.

The rating outcome will also depend on the amount of equity that Southern Union is willing to issue to support a stronger financial profile in accordance with the greater business risk, the agency added.

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