TEXT-S&P Revises ATCO Gas Australia Otlk To Pos; 'BBB' Rtgs Affirmed

Thu Jan 10, 2013 10:56pm EST
 
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Overview

-- ATCO Gas continues to strengthen its financial profile by suspending dividends and funding almost its entire capital works through internal cash flows.

-- As a result, ATCO Gas' financial metrics are likely to improve in the next 12 to 24 months to an extent that could support a rating of one-notch higher, all else being equal.

-- We have therefore revised our rating outlook to positive from stable, and affirmed the 'BBB' rating on ATCO Gas.

-- We may raise the rating if we believe ATCO Gas can sustainably achieve FFO-to-interest coverage and FFO/debt of better than 2.5x and 12% respectively.

Rating Action

On Jan. 11, 2013, Standard & Poor's Ratings Services revised its rating outlook on Western Australia-based gas distribution network company ATCO Gas Australia LP (ATCO Gas) to positive from stable. At the same time, we affirmed the 'BBB' ratings on the company.

Rationale   Continued...