S&P: PSEG, units on developing watch

Standard & Poor's said it placed its BBB corporate credit ratings of Public Service Enterprise Group Inc., PSEG Power LLC, and Public Service Electric & Gas Co. on CreditWatch with developing implications in response to the announced merger between Exelon Corp. and Enterprise.

At the same time, the ratings of Exelon were placed on CreditWatch with negative implications.

S&P said the developing CreditWatch listing (indicating that ratings could be raised or lowered) reflects the divergent credit paths facing the Enterprise companies. If the announced merger with Exelon is consummated, the credit quality of Enterprise and its subsidiaries should benefit from anticipated synergies and from the company's incorporation into a larger entity with a stronger credit profile.

However, if the merger does not come to pass, or is perceived to be failing, or there is further degradation in the performance at PSEG Power's nuclear assets in the interim, S&P said credit ratings at the Enterprise companies are likely to be lowered to reflect the financial consequences of such performance, the dispatch and cost implications of ongoing transmission constraints, and expectations that trading revenues may not be as robust as anticipated.

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