S&P acts on U.K. gas distributors

S&P said it took actions on three U.K.-based gas distribution companies, saying the next regulatory period starting next April will mean lower returns and more demanding regulatory targets.

“We are revising the outlook on Wales & West Utilities (WWU) issue ratings and Scotia Gas Networks Ltd. (SGN) to negative from stable, and affirming our ratings. The negative outlook reflects the risk that WWU and SGN could both operate with funds from operations (FFO) to debt consistently below the levels we see commensurate with their current ratings over the next regulatory period,” S&P said in a press release.

The affirmation on WWU includes its class A and subordinated debt at A- and BBB, respectively.

The agency also affirmed the BBB+ rating on Cadent Gas with a stable outlook.

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