The ratings on Spanish utility Gas Natural SDG S.A. (Gas Natural) reflect Standard&Poor's Ratings Services' view of the company's "strong" business risk profile and "significant" financial risk profile. Gas Natural's business risk profile is supported by its position as Spain's incumbent gas utility in what we view as a market with considerable growth potential given the current low penetration rate, its competitive positions in the Spanish electricity sector, its significant share of low-risk regulated gas and electricity activities in Spain and Latin America, and its flexible and profitable international midstream gas operations. However, the company's exposure to the weak and structurally impaired electricity in Spain offsets the strengths underpinning its business risk profile. Our expectation of chronic oversupply
