The ratings on Southern Natural Gas Co. are based on the strength of the El Paso Corp. consolidated entity. Thus, the ratings on Southern Natural Gas are expected to mirror those of El Paso. The ratings on El Paso continue to be pressured by continued reductions in cash flow estimates, ongoing refinancing risk, the inability to successfully meet debt reductions goals, and a stressed liquidity position. Reduced cash flow expectations are due primarily to lower capital spending at the exploration and production unit while, at the same time, the company's financial improvement has been prolonged by the need to use cash to fulfill collateral and margin posting requirements versus paying down debt. Continued deterioration in El Paso's cash flow interest
