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Announcement:

Moody's Disclosures on Credit Ratings of National Grid Plc

04 May 2012

London, 04 May 2012 -- The following release represents Moody's Investors Service's summary credit opinion on National Grid plc and includes certain regulatory disclosures regarding its ratings. This release does not constitute any change in Moody's ratings or rating rationale for National Grid Plc and its affiliates.

Moody's current ratings on National Grid Plc and its affiliates are:

National Grid Plc

Long-Term Issuer Rating of Baa1

Senior Unsecured (domestic and foreign currency) ratings of Baa1

Senior Unsecured MTN programme (foreign currency) ratings of (P)Baa1

Commercial Paper (foreign currency) ratings of P-2

Short-Term MTN programme (foreign currency) ratings of (P)P-2

National Grid USA

Long-Term Issuer Rating (domestic currency) of Baa1

Senior Unsecured (domestic and foreign currency) ratings of Baa1

Senior Unsecured MTN programme (foreign currency) ratings of (P)Baa1

Commercial Paper (domestic currency) P-2

Massachusetts Electric Company

Long-Term Issuer Rating of A3

Senior Unsecured (domestic currency) ratings of A3

Preferred Stock (domestic currency) ratings of Baa2

Commercial Paper (domestic currency) ratings of P-2

Narragansett Electric Company

Long-Term Issuer Rating of A3

First Mortgage Bonds (domestic currency) ratings of A1

Senior Secured MTN programme (domestic currency) ratings of (P)A1

Senior Unsecured (domestic currency) ratings of A3

Preferred Stock (domestic currency) ratings of Baa2

New England Power Company

Long-Term Issuer Rating of A3

Preferred Stock ratings of Baa2

Commercial Paper (domestic currency) ratings of P-2

BACKED Long-Term IRB/PC (domestic currency) ratings of A3

BACKED Short-Term MTN programme (domestic currency) ratings of VMIG 2

Niagara Mohawk Power Corporation

Long-Term Issuer Rating of A3

Senior Secured (domestic currency) ratings of A2

Senior Unsecured (domestic currency) ratings of A3

Senior Unsecured MTN programme (domestic currency) ratings of (P)A3

Preferred Stock (domestic currency) ratings of Baa2

Senior Secured Shelf (domestic currency) ratings of (P)A1

Senior Unsecured Shelf (domestic currency) ratings of (P)A3

BACKED Long-Term IRB/PC (domestic currency) ratings of A1

KeySpan Corporation

Long-Term Issuer Rating of Baa1

Senior Unsecured (domestic currency) ratings of Baa1

Senior Unsecured Shelf (domestic currency) ratings of (P)Baa1

Subordinate Shelf (domestic currency) ratings of (P)Baa2

Preferred Shelf (domestic currency) ratings of (P)Baa3

Preferred shelf -- PS2 (domestic currency) ratings of (P)Baa3

Colonial Gas Company

Long-Term Issuer Rating (domestic currency) of A3

First Mortgage Bonds (domestic currency) ratings of A1

Senior Secured MTN programme (domestic currency) ratings of (P)A1

Senior Unsecured (domestic currency) ratings of (P)A3

Boston Gas Company

Senior Unsecured (domestic currency) ratings of A3

Senior Unsecured MTN programme (domestic currency) ratings of (P)A3

National Grid Generation LLC

Long-Term Issuer Rating of Baa1

KeySpan Gas East Corporation

Long-Term Issuer Rating of A3

Senior Unsecured (domestic currency) ratings of A3

KeySpan Trust I

BACKED Preferred Shelf (domestic currency) ratings of (P)Baa2

KeySpan Trust II

BACKED Preferred Shelf (domestic currency) ratings of (P)Baa2

KeySpan Trust III

BACKED Preferred Shelf (domestic currency) ratings of (P)Baa2

National Grid Holdings Inc.

Long-Term Issuer Rating (domestic currency) ratings of Baa1

Short-Term Issuer Rating (domestic currency) ratings of P-2

Commercial Paper (domestic currency) ratings of P-2

National Grid Electricity Transmission plc

Senior Unsecured (domestic and foreign currency) ratings of A3

Senior Unsecured MTN programme (foreign currency) ratings of (P)A3

Commercial Paper (domestic and foreign currency) ratings of P-2

Short-Term MTN programme (foreign currency) ratings of (P)P-2

BACKED Senior Unsecured (domestic currency) ratings of A3

Underlying Senior Unsecured (domestic currency) ratings of A3

National Grid Gas Plc

Senior Unsecured (domestic and foreign currency) ratings of A3

Senior Unsecured MTN programme (foreign currency) ratings of (P)A3

Commercial Paper (foreign currency) ratings of P-2

Short-Term MTN programme (foreign currency) ratings of (P)P-2

BACKED Senior Unsecured (domestic and foreign currency) ratings of A3

British Transco Finance Inc.

BACKED Senior Unsecured (domestic currency) ratings of A3

BACKED Senior Unsecured Shelf (domestic currency) ratings of (P)A3

British Transco International Finance B.V.

BACKED Senior Unsecured (foreign currency) ratings of A3

BACKED Senior Unsecured MTN programme (domestic currency) ratings of (P)A3

British Transco Capital Inc.

BACKED Commercial Paper (domestic currency) ratings of P-2

RATINGS RATIONALE

National Grid plc

Moody's rating assessment of National Grid plc (National Grid) reflects the group's focus on the ownership and operation of electricity and gas networks in the UK and US and takes into account both the low business risk of these regulated assets and strong cash flow generation. The ratings also reflect, as negatives, the capital intensive nature of the group's business, a significant debt burden and the level of shareholder returns.

The rating outlook is stable. The 2010 rights issue evidenced management's prudent financial policy and strengthened National Grid's balance sheet to establish a degree of headroom within the current rating categories. We note, however, that this headroom is likely to be eroded over the medium term by the continuing investment programme and dividend payments.

WHAT COULD CHANGE THE RATING UP/DOWN

Moody's considers upward rating pressure for National Grid and its subsidiaries is unlikely in the medium term. As mentioned, the 2010 rights issue left National Grid and its subsidiaries better positioned in their rating categories but Moody's notes that the group's large capital investment programme for the UK and the possibility of additional investment in the US (above and beyond what is currently planned) will most likely reduce financial flexibility over time. The rating agency further considers that the group will favour using free cash flow to fund shareholder distributions and/or support growth rather than to reduce gearing.

Moody's anticipates that National Grid will demonstrate that it is able to achieve ratios of (i) consolidated RCF to Net Debt in excess of 9.0% and (ii) FFO Interest Cover in excess of 3.0x in 2011/12 and beyond and a failure to do so would likely lead to negative rating pressure. We further anticipate that any large expansion of the capital investment programme or material acquisitions will be supported by balance sheet strengthening.

The principal methodology used in this rating was Regulated Electric and Gas Utilities published in August 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

National Grid Electricity Transmission plc

Moody's rating assessment of National Grid Electricity Transmission plc (NGET) reflects the company's focus on regulated electricity transmission in the UK. The ratings also take into account, as negatives, the high level of debt, large ongoing capital investment programme and the dividend payments made to National Grid. NGET's ratings are also subject to the cap of the overall credit quality of the National Grid group, which we currently assess in the low A rating range(see European Regulated Utility Groups: Methodology Update, January 2007) .

The stable outlook reflects Moody's outlook on the credit quality of the National Grid group as a whole.

WHAT COULD CHANGE THE RATING UP/DOWN

Moody's considers upward rating pressure for National Grid and its subsidiaries is unlikely in the medium term. While a rights issue in 2010 left National Grid and its subsidiaries better positioned in their rating categories, Moody's notes that the group's large capital investment programme for the UK and the possibility of additional investment in the US (above and beyond what is currently planned) will most likely reduce financial flexibility over time. The rating agency further considers that the group will favour using free cash flow to fund shareholder distributions and/or support growth rather than to reduce gearing.

NGET's ratings could come under downward pressure if the company's leverage increased to a level of Net Debt to Regulated Asset Value (RAV) consistently above the high 60s. Furthermore, a deterioration in the consolidated credit quality of the National Grid group, even if unrelated to NGET, which resulted in the consolidated credit profile being viewed as below the A rating range, would be likely to negatively impact NGET's ratings.

The principal methodology used in this rating was Regulated Electric and Gas Networks published in August 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

National Grid Gas plc

Moody's rating assessment of National Grid Gas plc (NGG) reflects the company's focus on regulated gas transmission and distribution in the UK. The ratings also take into account, as negatives, the high level of debt, large ongoing capital investment programme and the dividend payments made to National Grid. NGG's ratings are also subject to the cap of the overall credit quality of the National Grid group, which we currently assess in the low A rating range(see European Regulated Utility Groups: Methodology Update, January 2007).

The stable outlook reflects Moody's outlook on the credit quality of the National Grid group as a whole.

WHAT COULD CHANGE THE RATING UP/DOWN

Moody's considers upward rating pressure for National Grid and its subsidiaries is unlikely in the medium term. While a rights issue in 2010 left National Grid and its subsidiaries better positioned in their rating categories, Moody's notes that the group's large capital investment programme for the UK and the possibility of additional investment in the US (above and beyond what is currently planned) will most likely reduce financial flexibility over time. The rating agency further considers that the group will favour using free cash flow to fund shareholder distributions and/or support growth rather than to reduce gearing.

NGG's ratings could come under downward pressure if the company's leverage increased to a level of Net Debt to RAV consistently above the high 60s. Furthermore, a deterioration in the consolidated credit quality of the National Grid group, even if unrelated to NGG, which resulted in the consolidated credit profile being viewed as below the A rating range, would be likely to negatively impact NGG's ratings.

The principal methodology used in this rating was Regulated Electric and Gas Networks published in August 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

British Transco Finance Inc., British Transco International Finance B.V. and British Transco Capital Inc.

The ratings assigned to the above reflect the guarantee of their obligations by NGG.

The stable outlook reflects Moody's outlook on the credit quality of the National Grid group as a whole.

WHAT COULD CHANGE THE RATING UP/DOWN

The ratings will move in line with those of NGG. Please refer to the section above on NGG for details of what would move the ratings of NGG.

The principal methodology used in these ratings was Regulated Electric and Gas Networks published in August 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

National Grid Holdings Inc.

Moody's rating assessment of National Grid Holdings Inc. (NGHI) reflects the favourable business and operating risk profile of its regulated electricity and gas operations in northeastern United States. The ratings also take into account, as negatives, the high level of debt, large ongoing capital investment programme and the dividend payments made to National Grid. NGHI is an intermediate holding company in the complex National Grid group and its rating further takes into account structural considerations, including NGHI's subordinated position relative to National Grid USA albeit mitigated by the moderate level of external debt at NG USA(see European Regulated Utility Groups: Methodology Update, January 2007).

The stable outlook reflects Moody's outlook on the credit quality of the National Grid group as a whole.

WHAT COULD CHANGE THE RATING UP/DOWN

Moody's considers upward rating pressure for National Grid and its subsidiaries is unlikely in the medium term. While a rights issue in 2010 left National Grid and its subsidiaries better positioned in their rating categories, Moody's notes that the group's large capital investment programme for the UK and the possibility of additional investment in the US (above and beyond what is currently planned) will most likely reduce financial flexibility over time. The rating agency further considers that the group will favour using free cash flow to fund shareholder distributions and/or support growth rather than to reduce gearing.

NGHI's ratings could be adversely affected by a deterioration in the consolidated credit quality of the National Grid group -- even if unrelated to NGHI -- that resulted in the consolidated credit profile being viewed as below the A rating category. In addition, NGHI's ratings could come under downward pressure if the credit quality of the NG USA group were to deteriorate or debt at NG USA were to increase significantly leading to greater structural subordination.

The principal methodology used in this rating was Regulated Electric and Gas Utilities published in August 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

National Grid USA

Moody's rating assessment of National Grid USA (NG USA) reflects the favourable business and operating risk profile of its regulated electricity and gas operations in northeastern United States. The ratings also take into account, as negatives, the high level of debt, large ongoing capital investment programme and the dividend payments made to National Grid. NG USA is an intermediate holding company in the complex National Grid group and its rating further takes into account structural considerations, including NG USA's subordinated position relative to the operating companies. NG USA's ratings are also subject to the cap of the overall credit quality of the National Grid group, which we currently assess in the low A rating range (see European Regulated Utility Groups: Methodology Update, January 2007).

The stable outlook reflects Moody's outlook on the credit quality of the National Grid group as a whole.

WHAT COULD CHANGE THE RATING UP/DOWN

Moody's considers upward rating pressure for National Grid and its subsidiaries is unlikely in the medium term. While a rights issue in 2010 left National Grid and its subsidiaries better positioned in their rating categories, Moody's notes that the group's large capital investment programme for the UK and the possibility of additional investment in the US (above and beyond what is currently planned) will most likely reduce financial flexibility over time. The rating agency further considers that the group will favour using free cash flow to fund shareholder distributions and/or support growth rather than to reduce gearing.

A deterioration in the consolidated credit quality of the National Grid group --even if unrelated to NG USA -- which resulted in the consolidated credit profile being viewed as below the A rating category, would be likely to negatively impact NG USA's ratings. NG USA's ratings could come under downward pressure if the ratio of CFO Pre-W/C to Debt appeared likely to remain below mid-teens over the medium term.

The principal methodology used in this rating was Regulated Electric and Gas Utilities published in August 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

Massachusetts Electric Company

Moody's rating assessment of Massachusetts Electric Company (MECO) reflects the favourable business and operating risk profile of its regulated electric distribution business which serves approximately 1.3 million customers in an area consisting of 171 cities and towns in Massachusetts. The ratings also take into account the current and prospective level of debt, large ongoing capital investment programme and likely dividend payments to NG USA. MeCo's rating is also subject to the cap of the overall credit quality of the National Grid group, which we currently assess in the low A rating range (see European Regulated Utility Groups: Methodology Update, January 2007).

The stable outlook reflects Moody's outlook on the credit quality of the National Grid group as a whole.

WHAT COULD CHANGE THE RATING UP/DOWN

Moody's considers upward rating pressure for National Grid and its subsidiaries is unlikely in the medium term. While a rights issue in 2010 left National Grid and its subsidiaries better positioned in their rating categories, Moody's notes that the group's large capital investment programme for the UK and the possibility of additional investment in the US (above and beyond what is currently planned) will most likely reduce financial flexibility over time. The rating agency further considers that the group will favour using free cash flow to fund shareholder distributions and/or support growth rather than to reduce gearing.

A deterioration in the consolidated credit quality of the National Grid group -- even if unrelated to MeCo -- which resulted in the consolidated credit profile being viewed as below the A rating category, would be likely to negatively impact MeCo's ratings. MeCo's ratings could come under downward pressure if the ratio of CFO Pre-W/C to Debt appeared likely to remain below mid-teens over the medium term.

The principal methodology used in this rating was Regulated Electric and Gas Utilities published in August 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

Narragansett Electric Company

Moody's rating assessment of Narragansett Electric Company (NEC) reflects the favourable business and operating risk profile of its regulated distribution business which provides electricity to approximately 500,000 customers and gas to 250,000 customers in 38 cities and towns in Rhode Island. The ratings also take into account, as negatives, the high level of debt, large ongoing capital investment programme and likely dividend payments to NG USA. NEC's rating is also subject to the cap of the overall credit quality of the National Grid group, which we currently assess in the low A rating range (see European Regulated Utility Groups: Methodology Update, January 2007).

The stable outlook reflects Moody's outlook on the credit quality of the National Grid group as a whole.

WHAT COULD CHANGE THE RATING UP/DOWN

Moody's considers upward rating pressure for National Grid and its subsidiaries is unlikely in the medium term. While a rights issue in 2010 left National Grid and its subsidiaries better positioned in their rating categories, Moody's notes that the group's large capital investment programme for the UK and the possibility of additional investment in the US (above and beyond what is currently planned) will most likely reduce financial flexibility over time. The rating agency further considers that the group will favour using free cash flow to fund shareholder distributions and/or support growth rather than to reduce gearing.

A deterioration in the consolidated credit quality of the National Grid group -- even if unrelated to NEC -- which resulted in the consolidated credit profile being viewed as below the A rating category, would be likely to negatively impact NEC's ratings. In addition, NEC's ratings could come under pressure if coverage of interest and debt by cash flow from operations (exclusive of the effects of changes in working capital) were to fall below 4.5x and 22%.

The principal methodology used in this rating was Regulated Electric and Gas Utilities published in August 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

New England Power Company

Moody's rating assessment of New England Power Company (NEP) reflects its favourable business and operating risk profile as an energy delivery business. The ratings also take into account, as negatives, the high level of debt, large ongoing capital investment programme and likely dividend payments to NG USA. NEP's ratings are also subject to the cap of the overall credit quality of the National Grid group, which we currently assess in the low A rating range (see European Regulated Utility Groups: Methodology Update, January 2007).

The stable outlook reflects Moody's outlook on the credit quality of the National Grid group as a whole.

WHAT COULD CHANGE THE RATING UP/DOWN

Moody's considers upward rating pressure for National Grid and its subsidiaries is unlikely in the medium term. While a rights issue in 2010 left National Grid and its subsidiaries better positioned in their rating categories, Moody's notes that the group's large capital investment programme for the UK and the possibility of additional investment in the US (above and beyond what is currently planned) will most likely reduce financial flexibility over time. The rating agency further considers that the group will favour using free cash flow to fund shareholder distributions and/or support growth rather than to reduce gearing.

A deterioration in the consolidated credit quality of the National Grid group -- even if unrelated to NEP -- which resulted in the consolidated credit profile being viewed as below the A rating category, would be likely to negatively impact NEP's ratings. NEP's ratings could also come under downward pressure if the ratio of CFO Pre-W/C to Debt appeared likely to remain below mid-teens over the medium term.

The principal methodology used in this rating was Regulated Electric and Gas Utilities published in August 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

Niagara Mohawk Power Corporation

Moody's rating assessment of Niagara Mohawk Power Corporation (NiMo) reflects its favourable business and operating risk profile as an energy delivery business. The ratings also take into account, as negatives, the high level of debt, large ongoing capital investment programme and likely dividend payments to NG USA. NiMo's ratings are also subject to the cap of the overall credit quality of the National Grid group, which we currently assess in the low A rating range (see European Regulated Utility Groups: Methodology Update, January 2007).

The stable outlook reflects Moody's outlook on the credit quality of the National Grid group as a whole.

WHAT COULD CHANGE THE RATING UP/DOWN

Moody's considers upward rating pressure for National Grid and its subsidiaries is unlikely in the medium term. While a rights issue in 2010 left National Grid and its subsidiaries better positioned in their rating categories, Moody's notes that the group's large capital investment programme for the UK and the possibility of additional investment in the US (above and beyond what is currently planned) will most likely reduce financial flexibility over time. The rating agency further considers that the group will favour using free cash flow to fund shareholder distributions and/or support growth rather than to reduce gearing.

A deterioration in the consolidated credit quality of the National Grid group -- even if unrelated to NiMo -- which resulted in the consolidated credit profile being viewed as below the A rating category, would be likely to negatively impact NiMo's ratings. NiMo's ratings could also come under downward pressure if the ratio of CFO Pre-W/C to Debt appeared likely to remain below mid-teens over the medium term.

The principal methodology used in this rating was Regulated Electric and Gas Utilities published in August 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

KeySpan Corporation

Moody's rating assessment of KeySpan Corporation (KeySpan) reflects its focus on regulated operations through (i) six natural gas local distribution companies Brooklyn Union Gas, KeySpan Gas East Corporation, Boston Gas Company, Colonial Gas Company, Essex Gas and Energy North which provide services to approximately 2.6 million customers in New York City, Long Island, Massachusetts and New Hampshire and (ii) ownership of electric generating plants in Nassau and Suffolk Counties on Long Island. The rating further takes into account, as negatives, a high level of debt, an ongoing capital investment programme and dividend payments made to NG USA. KeySpan's ratings are also subject to the cap of the overall credit quality of the National Grid group which we currently assess in the low A rating range (see European Regulated Utility Groups: Methodology Update, January 2007).

The stable outlook reflects Moody's outlook on the credit quality of the National Grid group as a whole.

WHAT COULD CHANGE THE RATING UP/DOWN

Moody's considers upward rating pressure for National Grid and its subsidiaries is unlikely in the medium term. While a rights issue in 2010 left National Grid and its subsidiaries better positioned in their rating categories, Moody's notes that the group's large capital investment programme for the UK and the possibility of additional investment in the US (above and beyond what is currently planned) will most likely reduce financial flexibility over time. The rating agency further considers that the group will favour using free cash flow to fund shareholder distributions and/or support growth rather than to reduce gearing.

A deterioration in the consolidated credit quality of the National Grid group -- even if unrelated to KeySpan -- which resulted in the consolidated credit profile being viewed as below the A rating category, would be likely to negatively impact KeySpan's ratings. KeySpan's ratings could also come under downward pressure if the ratio of CFO Pre-W/C to Debt appeared likely to remain below mid-teens over the medium term.

The principal methodology used in this rating was Regulated Electric and Gas Utilities published in August 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

Colonial Gas Company

Moody's rating assessment of Colonial Gas (Colonial) reflects its favourable business and operating risk profile as a natural gas distribution company, serving approximately 194,000 residential, commercial and industrial customers, and the regulatory framework under which it operates. It also reflects the rating agency's expectation of an improvement in achieved returns following the November 2010 order by the Massachusetts Department of Public Utilities, the regulator for Colonial Gas, approving inter alia higher revenues. In addition, the rating takes into account the current and prospective level of debt, an ongoing capital investment programme and likely dividend payments to KeySpan. The rating is also considered in the context of the overall credit quality of the National Grid group which we currently assess in the low A rating range (see European Regulated Utility Groups: Methodology Update, January 2007).

The stable outlook reflects Moody's outlook on the credit quality of the National Grid group as a whole.

WHAT COULD CHANGE THE RATING UP/DOWN

Moody's considers upward rating pressure for National Grid and its subsidiaries is unlikely in the medium term. While a rights issue in 2010 left National Grid and its subsidiaries better positioned in their rating categories, Moody's notes that the group's large capital investment programme for the UK and the possibility of additional investment in the US (above and beyond what is currently planned) will most likely reduce financial flexibility over time. The rating agency further considers that the group will favour using free cash flow to fund shareholder distributions and/or support growth rather than to reduce gearing.

A deterioration in the consolidated credit quality of the National Grid group, even if unrelated to Colonial, which resulted in the consolidated credit profile being viewed as below the A range, would be likely to negatively impact Colonial's rating. Colonial's rating could come under downward pressure if the ratio of CFO Pre-W/C to Debt appeared likely to remain below mid-teens over the medium term.

The principal methodology used in this rating was Regulated Electric and Gas Utilities published in August 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

Boston Gas Company

Moody's rating assessment of Boston Gas Company (Boston Gas) reflects its favourable business and operating risk profile as a natural gas distribution company and the regulatory framework under which it operates. It also reflects the rating agency's expectation of a significant improvement in achieved returns following the November 2010 order by the Massachusetts Department of Public Utilities, the regulator for Boston Gas, approving inter alia higher revenues. In addition, the rating takes into account the current and prospective level of debt, an ongoing capital investment programme and likely dividend payments to KeySpan. The rating is also considered in the context of the overall credit quality of the National Grid group, which we currently assess in the low A rating category.

The stable outlook reflects Moody's outlook on the credit quality of the National Grid group as a whole.

WHAT COULD CHANGE THE RATING UP/DOWN

Moody's considers upward rating pressure for National Grid and its subsidiaries is unlikely in the medium term. While a rights issue in 2010 left National Grid and its subsidiaries better positioned in their rating categories, Moody's notes that the group's large capital investment programme for the UK and the possibility of additional investment in the US (above and beyond what is currently planned) will most likely reduce financial flexibility over time. The rating agency further considers that the group will favour using free cash flow to fund shareholder distribution.

Conversely, Boston Gas' rating could be adversely affected by a deterioration in National Grid's consolidated credit quality -- even if unrelated to Boston Gas -- that resulted in Moody's viewing the consolidated credit profile of the group as being below the A rating category. The rating could also come under downward pressure if the ratio of CFO Pre-W/C to Debt appeared likely to deteriorate and remain below mid-teens over the medium term.

The principal methodology used in this rating was Regulated Electric and Gas Utilities published in August 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

National Grid Generation LLC

Moody's rating assessment of National Grid Generation reflects its favourable business and operating risk profile as the owner of 53 electric generation units that together provide 4.1GW of power under contract to the The Long Island Power Authority (LIPA). In addition, the rating takes into account the current and prospective level of debt, an ongoing capital investment programme and likely dividend payments to KeySpan. The rating is also considered in the context of the overall credit quality of the National Grid group, which we currently assess in the low A rating category (see European Regulated Utility Groups: Methodology Update, January 2007) .

The Power Supply Agreement (PSA) with LIPA, which is scheduled to expire in May 2013 [renewed?] provides for the sale of all of the capacity and, to the extent LIPA requests, energy conversion from the facilities covered by the agreement. Any available power not needed to meet LIPA's requirements is made available for sale in the open market. Rates payable under the PSA are reviewed by the Federal Energy Regulatory Commission (FERC) which provides a similar economic effect to cost of service state regulation.

The outlook is stable reflecting Moody's outlook on the credit quality of the National Grid group as a whole.

WHAT COULD CHANGE THE RATING UP/DOWN

Moody's considers upward rating pressure for National Grid and its subsidiaries is unlikely in the medium term. While a rights issue in 2010 left National Grid and its subsidiaries better positioned in their rating categories, Moody's notes that the group's large capital investment programme for the UK and the possibility of additional investment in the US (above and beyond what is currently planned) will most likely reduce financial flexibility over time. The rating agency further considers that the group will favour using free cash flow to fund shareholder distribution.

Conversely, National Grid Generation's rating could be adversely affected by a deterioration in National Grid's consolidated credit quality -- even if unrelated to National Grid Generation -- that resulted in Moody's viewing the consolidated credit profile of the group as being below the A rating category. The rating could also come under downward pressure if the ratio of CFO Pre-W/C to Debt appeared likely to deteriorate and remain below mid-teens over the medium term.

The principal methodology used in this rating was Regulated Electric and Gas Utilities published in August 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

KeySpan Gas East Corporation

Moody's rating assessment of KeySpan Gas East Corporation (KEDLI) reflects its favourable business and operating risk profile as a natural gas distribution company, serving approximately 550,000 customers, and the regulatory framework under which it operates. In addition, the rating takes into account the current and prospective level of debt, an ongoing capital investment programme and likely dividend payments to KeySpan. The rating is also considered in the context of the overall credit quality of the National Grid group, which we currently assess in the low A rating category (see European Regulated Utility Groups: Methodology Update, January 2007).

The outlook is stable reflecting Moody's outlook on the credit quality of the National Grid group as a whole.

WHAT COULD CHANGE THE RATING UP/DOWN

Moody's considers upward rating pressure for National Grid and its subsidiaries is unlikely in the medium term. While a rights issue in 2010 left National Grid and its subsidiaries better positioned in their rating categories, Moody's notes that the group's large capital investment programme for the UK and the possibility of additional investment in the US (above and beyond what is currently planned) will most likely reduce financial flexibility over time. The rating agency further considers that the group will favour using free cash flow to fund shareholder distribution.

Conversely, KEDLI's rating could be adversely affected by a deterioration in National Grid's consolidated credit quality -- even if unrelated to KEDLI -- that resulted in Moody's viewing the consolidated credit profile of the group as being below the A rating category. The rating could also come under downward pressure if the ratio of CFO Pre-W/C to Debt appeared likely to deteriorate and remain below mid-teens over the medium term.

The principal methodology used in this rating was Regulated Electric and Gas Utilities published in August 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

KeySpan Trust I, II and III

The ratings assigned to the debt programmes of KeySpan Trust I, II and III reflect the terms of the respective programmes including the guarantees provided by KeySpan Corporation. Please refer to the section above for the rating rationale for KeySpan Corporation.

WHAT COULD CHANGE THE RATING UP/DOWN

As they are positioned relative to the rating of KeySpan Corporation, a change in either (i) Moody's relative notching practice or (ii) the rating of KeySpan Corporation could affect the ratings.

The principal methodology used in these ratings was Regulated Electric and Gas Utilities published in August 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

The ratings have been disclosed to the rated entities or their designated agent(s) and issued with no amendment resulting from that disclosure.

Information sources used to prepare each of the ratings are the following: parties involved in the ratings, parties not involved in the ratings, public information, confidential and proprietary Moody's Investors Service information, and confidential and proprietary Moody's Analytics information.

Moody's considers the quality of information available on the rated entities, obligations or credits satisfactory for the purposes of issuing these ratings.

Moody's adopts all necessary measures so that the information it uses in assigning the ratings is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Moody's Investors Service may have provided Ancillary or Other Permissible Service(s) to the rated entities or their related third parties within the two years preceding the credit rating action. Please see the special report "Ancillary or other permissible services provided to entities rated by MIS's EU credit rating agencies" on the ratings disclosure page on our website www.moodys.com for further information.

Please see the ratings disclosure page on www.moodys.com for general disclosure on potential conflicts of interests.

Please see the ratings disclosure page on www.moodys.com for information on (A) MCO's major shareholders (above 5%) and for (B) further information regarding certain affiliations that may exist between directors of MCO and rated entities as well as (C) the names of entities that hold ratings from MIS that have also publicly reported to the SEC an ownership interest in MCO of more than 5%. A member of the board of directors of this rated entity may also be a member of the board of directors of a shareholder of Moody's Corporation; however, Moody's has not independently verified this matter.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history. The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Neil Griffiths-Lambeth
VP - Senior Credit Officer
Corporate Finance Group
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Monica Merli
MD - Infrastructure Finance
Corporate Finance Group
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Releasing Office:
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Moody's Disclosures on Credit Ratings of National Grid Plc
No Related Data.
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