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S&P rates KeySpan notes A
Standard & Poor's said it assigned its A rating to energy provider KeySpan Corp.'s proposed $460 million senior unsecured notes.
The notes are a remarketing of up to $460 million of notes issued in May 2002 in connection with KeySpan's issuance of 9.2 million equity units. The outlook is stable.
KeySpan will not receive any proceeds from the proposed remarketing. Instead, the company is remarketing the notes on behalf of existing KeySpan equity unitholders.
Each equity unit contract consists of a note in the principal amount of $50 and a forward purchase contract, under which the current bondholders agree to purchase shares of common stock from KeySpan on May 16.
Therefore, on May 16, KeySpan will receive an additional $460 million of new proceeds from the associated common stock issuance and plans to use the proceeds for corporate purposes and to reduce other outstanding debt during 2005.
S&P said the ratings on KeySpan reflect the consolidated credit profiles of the company's regulated gas distribution operations, its unregulated electricity generation operations and smaller diversified activities.
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