Standard&Poor's Ratings Services has affirmed its 'BBB-' ratings on Philadelphia, Pa.'s bonds issued under Philadelphia Gas Works (PGW) closed senior lien bonds issued under its 1975 ordinance; its 'BBB-' rating on subordinate lien (the working lien) debt outstanding issued under the 1998 ordinance; and its 'BB+' rating on PGW's junior subordinate bonds. The outlook is stable. In our opinion, the ratings reflect: A sizable service territory (with weak demographics) that is subject to open competition for gas supply and transmission, but not distribution; Dependence on Pennsylvania Public Utility Commission (PUC) approval for base-rate increases, coupled with already-high rates; Stabilized collections, financial operations, and coverage levels, balanced by weak liquidity that depends on a commercial paper (CP) program backed
