The ratings on Southern Natural Gas Co. (SNG), a subsidiary of El Paso Corp., are based on the credit quality of the consolidated entity. Thus, the ratings on SNG are expected to mirror those of parent El Paso. Standard&Poor's raised the ratings and revised the outlook on El Paso and its subsidiaries to positive from stable in June 2005, recognizing the considerable progress that the company has made in reducing exposure to unregulated operations, improving liquidity ahead of large debt maturities, and a leveling of declines at the exploration and production (E&P) business. Upward ratings momentum is somewhat diminished by the effect on the credit profile of hurricane damage, which at its peak interrupted more than 10% of
