The ratings on Spanish utility Gas Natural SDG, S.A. are based on the group's low-risk regulated domestic gas distribution activities, which are complemented by a leading competitive position in gas supply and a strong financial profile. These strengths are offset by management's growth-oriented strategy and financial policy--as demonstrated by the bid for Spanish utility Endesa S.A. (A/Watch Neg/A-1)--and by the group's nonregulated activities and material presence in Latin America. Following its failed €22.55 billion hostile bid for a 100% stake in Endesa, Gas Natural has indicated that it will continue to develop both its liquefied natural gas (LNG) business in the Atlantic area and its gas distribution activities. Moreover, it plans to continue expanding its electricity business and integrating it
