The ratings on diversified energy company Aquila Inc. are on CreditWatch with positive implications reflecting the company's announcement that it is selling four utility businesses for a total of $897 million, plus working capital and subject to net plant adjustments. If approved by the various regulatory commissions, the sales would provide an opportunity for debt reduction--potentially 30% of total adjusted debt. The ratings were placed on CreditWatch Sept. 22, 2005. Although the loss of the utility assets to be sold is likely to reduce cash flows by about 30%, Standard&Poor's expects the sale to improve the Kansas City, Mo.-based company's financial profile overall. First, the company intends to use sales proceeds to pay down debt. The debt reduction
