The 'BBB' corporate credit ratings on diversified energy company Public Service Enterprise Group Inc. (Enterprise) and its units, PSEG Power LLC and Public Service Electric&Gas Co. (PSE&G), are on CreditWatch with developing implications to reflect the divergent credit paths facing the Enterprise companies. The merger with Exelon Corp. has the potential to yield benefits for the Enterprise companies' bondholders. At the same time, the CreditWatch listing reflects credit risks due to the company's significant leverage that is compounded by sizable negative mark to market of energy supply commitments and associated collateral requirements. As supply contracts are renewed and aligned with prevailing market prices, their negative influence on leverage should abate. Our concerns associated with nuclear operational issues have
