S&P: TXU on developing watch

Standard & Poor's said it placed its BBB corporate credit rating on TXU Gas Co., a subsidiary of TXU Corp. (BBB/negative/--), on CreditWatch with developing implications, which indicates that the rating may be raised, lowered or affirmed.

S&P said the rating action is in response to TXU management's announcement that TXU Gas will be sold.

The sale is part of a companywide restructuring aimed at focusing management's attention on areas of real competitive advantage and at lowering operating costs overall. TXU Gas accounted for only about 6% of TXU's consolidated EBITDA in 2003.

"The financial strength of the acquirer and the financing of the acquisition will be key determinants of TXU Gas' future credit profile," said S&P credit analyst Judith Waite.

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