The ratings on Gas Natural SDG, S.A., Spain's principal gas utility, are based on its regulated domestic gas distribution activities, complemented by a strong competitive position in gas supply in Spain and a currently strong financial profile. These strengths are offset by the group's increasing share of nonregulated revenues, together with a growth-oriented strategy, involving diversification into Latin America, and likely acquisitions in Europe. In first-half 2002, strategic shareholder Repsol-YPF S.A. (BBB/Negative/A-3) reduced its shareholding in Gas Natural to 24% from 47%; this was a positive credit event as the two companies' ratings are no longer tied. Turnover was €5.6 billion and EBITDA €1.46 billion in 2001, 76% of which was generated in Spain, the remainder abroad (of which less
