On Feb. 20, 2009, Standard&Poor's Ratings Services lowered its long- and short-term corporate credit ratings on Spanish utility Gas Natural SDG, S.A. to 'BBB+/A-2' from 'A/A-1'. The ratings remain on CreditWatch with negative implications, where they were placed on Aug. 1, 2008, following the group's announcement of its proposed acquisition of Spanish utility Union Fenosa S.A. The downgrade follows the approval of the acquisition, with conditions, by Spain's national competition authority. It reflects our expectation that the acquisition--which now seems highly likely to go ahead--will weaken Gas Natural's credit profile to levels no longer compatible with an 'A' category long-term rating. The ratings will remain on CreditWatch until completion of the transaction and our subsequent analysis of the
