We are assigning our preliminary 'BBB-' corporate credit rating to Portuguese gas distribution network operator Galp Gas Natural Distribuicao S.A. (GGND). We assess GGND's regulated gas distribution business risk profile as excellent and its financial risk profile as aggressive. The rating is constrained by our view of the consolidated creditworthiness of GGND and its parent, oil and gas company Galp Energia. However, based on the material the company has provided, we believe that GGND is sufficiently insulated from its parent to be rated one notch above the group credit profile. The stable outlook reflects GGND's long-term franchise agreement, supportive operating and regulatory environment, and management's track record of meeting regulatory expectations. LONDON (S&P Global Ratings) Aug. 25, 2016--S&P Global Ratings
