S&P upgrades AGL Resources

S&P said it raised the issuer credit rating on AGL Resources Inc. and its subsidiaries Atlanta Gas Light Co., Nicor Gas Co. and Pivotal Utility Holdings, Inc. Project to A- from BBB+.

The outlook is negative.

Southern Co. recently received all regulatory approvals that are necessary to acquire AGL Resources and the closing of the deal is expected on or about July 1, S&P said.

The upgrades reflect a view that AGL Resources and its subsidiaries will be core subsidiaries of Southern, S&P said.

The negative outlook reflects the outlook of the new parent, Southern, the agency said.

Given the combined entity's enhanced presence in Georgia, S&P said it expects that Southern and AGL Resources will continue to effectively manage regulatory risk in the state.

The ratings also consider the strength of the company's regulated utility operations, which benefit from exposure to constructive regulatory frameworks, large and diverse customer bases with modest growth characteristics and regulatory and operating diversity, the agency said.

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