Fitch cuts National Grid Gas, assigns ratings

Fitch Ratings said it downgraded National Grid Gas Finance plc's (NGGF; now Cadent Gas Finance plc) £3 billion senior unsecured notes and €750 million senior unsecured notes to A- from A and removed them from Rating Watch Negative (RWN).

The agency simultaneously assigned an issuer default rating of BBB+ and senior unsecured rating of A- to National Grid Gas Distribution Ltd. (NGGD; now Cadent Gas Ltd.), NGGF's guarantor.

The outlook on the issuer default rating is stable.

Fitch said the downgrade reflects its view that the credit profile of the substitute guarantor, NGGD, is lower than that of the initial guarantor, National Grid Gas plc (A-/stable, senior unsecured rating A).

The agency’s assessment of NGGD's credit profile incorporates the combination of the strong business profile due to the fully regulated nature of the four U.K. gas distribution networks, target gearing of 65% net debt to regulated asset value and post-maintenance interest cover ratio at just over 2 times, which is strong for the rating.

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