NOTE: On March 3, 2021, the press release was corrected as follows: In the list of affected ratings, under National Grid Electricity Transmission plc, added the rating action on the Long-term Underlying Senior Unsecured Regular Bond/Debenture (Domestic). Revised release follows.
London, 02 March 2021 -- Moody's Investors Service, (Moody's) has today downgraded
to Baa2 from Baa1 the issuer and senior unsecured ratings on National
Grid plc, the ultimate holding company of the National Grid group.
Moody's has also downgraded to Baa2 from Baa1 the issuer ratings
of the group's US intermediate holding companies, National
Grid North America Inc. (NGNA) and National Grid USA (NG USA).
In all cases, the outlook has been changed to stable from negative.
Concurrently, Moody's has downgraded to Baa1 from A3 the ratings
of all the group's operating subsidiaries in the UK, with the transmission
networks accounting for the vast majority of the group's UK earnings
and regulated assets, and the group's operating subsidiaries
in the US that provide distribution activities, either solely or
primarily, in service territories outside of New York. The
affected entities are: National Grid Electricity Transmission plc
(NGET); National Grid Gas plc (NGG); National Grid Electricity
System Operator Limited (NG ESO); Boston Gas Company (Boston Gas),
Massachusetts Electric Company (MECO) and Narragansett Electric Company
(NECO). For all these entities, the outlook has been changed
to stable from negative.
Moody's has affirmed the A3 issuer and senior unsecured ratings
of New England Power Company (NEP), which carries out electricity
transmission activities in the US, and maintained the stable outlook.
Moody's has changed the outlook to negative from stable on The Brooklyn
Union Gas Company (KEDNY), one of the group's two gas local
distribution companies operating in downstate New York, and affirmed
KEDNY's Baa1 issuer and senior unsecured ratings. No rating
action was taken on the group's two other New York subsidiaries,
KeySpan Gas East Corporation (KEDLI) and Niagara Mohawk Power Corporation
(NiMo), which are both on negative outlook.
Moody's has also taken related rating actions on (1) wholly owned finance
subsidiaries of the group, NGG Finance plc and British Transco International
Finance B.V.; (2) debt of another subsidiary,
Nantucket Electric, which is guaranteed by MECO; and (3) debt
assumed by NG USA (originally issued by KeySpan Corporation) and Boston
Gas (originally issued by Colonial Gas Company); and (4) National
Grid Generation LLC's (Genco's) ratings.
Moody's has affirmed Prime-2 short-term ratings for National
Grid plc, NGNA, NG USA, NGET and NGG.
A full list of affected ratings appears toward the end of this press release.
RATINGS RATIONALE
NATIONAL GRID PLC -- DOWNGRADE AND STABLE OUTLOOK
The downgrade of National Grid plc's issuer and senior unsecured
ratings to Baa2 from Baa1 reflects Moody's expectation that the
group will not maintain a financial profile in line with the rating agency's
minimum guidance for the Baa1 rating level over at least the next 2-3
years under the group's strategy and updated financial policy.
On 2 March, National Grid announced it will continue to (1) undertake
a sizeable investment programme in the UK, though Moody's
expects investment levels to remain below those in the US, and has
previously guided to average growth in the group's regulated assets
of 5-7% per annum over the medium term; and (2) maintain
material shareholder distributions by continuing to grow the dividend
at least in line with (CPIH) inflation over the medium term. Both
factors, coupled with substantial debt at various holding companies
and US tax reform, have depressed cash flow metrics in recent years
with the group exhibiting Retained Cash Flow (RCF) to Net Debt just above
9% in fiscal years ending March 2019 and March 2020.
Moody's expects pressure on operational cash flows to intensify
over the next few years as (1) tough multi-year regulatory determinations
take effect for the vast majority of the group's regulated assets
over the next 12 months; and (2) the impact of the coronavirus pandemic
fall through - greater regulatory scrutiny of the impact on consumers
of rate case proposals and the potential for lower allowed returns from
the fall in risk-free rates.
For the group's UK transmission businesses, around half of
the group's regulated assets, cash allowed equity returns
will be 35-40% lower in the forthcoming price control (RIIO-T2,
which commences on 1 April), averaging c. 4.3%
(at 60% gearing) compared to 6.8-7.0%
in the current control. In addition, the companies will be
able to keep a lower proportion of any outperformance of regulatory cost
allowances, material for NGET in the current price control.
Moody's notes National Grid has lodged an appeal on behalf of its
UK transmission businesses on the regulator's cut in allowed equity
returns for a RIIO-T2, with a decision by the appeal body
(Competition and Markets Authority, CMA) expected no later than
November. However, based on recent UK regulatory determinations
and the CMA's updated thinking for outstanding appeals in the UK
water sector, Moody's considers there is limited potential
upside, if any, beyond the 25 basis point reduction in allowed
equity returns from assumed outperformance -- the regulator's
most controversial proposal. The removal of this downward adjustment
would result in a GBP20-25 million annual increase in allowed
revenue but this (1) represents less than 0.1% of the group's
net debt, over GBP30 billion at September 2020; (2) is
almost equivalent to the reduction in allowed revenues across for the
businesses for the perceived poor quality of the regulatory submission.
Over half of the group's US rate base pertains to its New York operations,
one of the regions worst affected by the coronavirus pandemic.
National Grid is currently in rate case settlement discussions for all
three of its New York businesses. However, the delay in securing
updated rates in downstate New York is already acting as a drag on these
businesses' metrics, though there is a make-whole provision
for the shortfall once a settlement is agreed. Moody's believes
these delays are reflective of an operating environment for the state's
utilities, particularly for gas local distribution companies (all
of KEDLI and KEDNY's operations and part of NiMo's),
that has become materially more challenging since National Grid made its
filings for KEDLI and KEDNY in April 2019.
The state regulator (the Public Service Commission, PSC) continued
to cut allowed returns in determinations made in 2020 (to authorised return
on equity [ROE] of 8.8% whilst retaining a 48%
equity layer); and appears to have placed greater emphasis on affordability,
with extensive coronavirus-related provisions included in rulings
made since the pandemic hit the state, including back-loading
of rate increases.
At the same time, political rhetoric and actions taken towards various
state utilities have increased. New York State Governor Andrew
Cuomo has formally threatened to revoke several utility operating licenses,
including KEDLI's and KEDNY's (though this threat related to a service
moratorium on new gas connections was subsequently rescinded following
a solution being reached), and in November 2020 published a bill
(republished in February 2021) outlining a formal process for doing so,
with more severe penalties for underperformance. The PSC has also
published a proposal in February 2021 for overhauling gas planning arrangements
to limit the growth of new gas infrastructure.
The stable outlook reflects Moody's expectation that National Grid's
key metrics will recover from the lows of FY2021, expected to be
RCF/Net Debt of 6-7% when the pandemic significantly depresses
them, and will then remain materially above 7% from FY2023
onwards, but excluding timing differences will not be materially
above 9% over the next few years. The group has only timing
exposure to the under-recovery of allowed revenue in FY2021 due
to revenue decoupling for all its regulated businesses, with the
shortfall recouped for its UK businesses in FY2023. For additional
covid-related costs, more significant in the US where the
retail activities of the distribution utilities mean bad debts will be
above regulatory allowances, the extent and timeliness of cost recovery
remain uncertain, with state-wide proceedings most advanced
in Massachusetts.
NGNA, NG USA AND GENCO-- DOWNGRADE AND STABLE OUTLOOK
The downgrade of NGNA's and NG USA's issuer ratings to Baa2
from Baa1 primarily reflects the downgrade of National Grid plc,
given the significant movement of funds between the group's holding
companies. It also reflects the persistent weakness of key credit
metrics for both entities with cash flow from operations pre-working
capital (CFO pre-WC) / debt in the low double digits in percentage
terms, below our Baa1 guidance of 15%.
The metrics of these two intermediate holding companies, with NGNA
sitting above NG USA, are a function of the consolidated credit
quality of the group's US operating subsidiaries and the level of
holding company debt. NGNA's cash flow metrics have improved
in recent years, albeit from very low levels, largely driven
by National Grid plc injecting $5.5 billion of equity since
June 2017, over 25% of NGNA's debt at March 2020.
Moody's estimates this has reduced HoldCo debt at either NGNA or
NG USA from around 48% of the consolidated US group's debt
at March 2017 to around 30% at March 2021. These equity
injections have not been passed down to NG USA, whose annual dividends
of c. $0.6 billion per annum in recent years,
have allowed NGNA to repay intercompany notes (for acquisition debt) to
affiliates of National Grid plc. Moody's considers the level
of HoldCo debt, with any new external debt only raised at NGNA rather
than NG USA, will be significantly influenced by the overall requirements
of the National Grid Group..
We assess the consolidated credit quality of the group's US operating
subsidiaries in aggregate as commensurate with a weak A3/strong Baa1 rating.
As with other US utilities, US tax reform has depressed operating
cash flows but the challenging operating environment in New York has had
a larger impact on National Grid than some other groups. The ratings
are supported by the low business risk associated with electricity transmission
and electricity and gas distribution, as well as the group's diversification
across four transparent and largely supportive regulatory regimes.
Given the level of support that the National Grid group has provided to
NGNA in recent years, the stable outlook on NG USA and NGNA is tied
to that on National Grid plc.
The downgrade and the outlook change to stable of Genco is linked to the
rating action on its parent companies, NGNA and NG USA, because
Moody's assessment is that Genco's weaker underlying credit
quality is offset by the high likelihood that its parent companies would
provide support if it were to become necessary.
In addition to the likelihood of support from its parent companies,
Genco's Baa2 issuer rating reflects the company's good cash flow visibility
under a Power Supply Agreement (PSA) with the Long Island Power Authority
(LIPA) that covers substantially all of the company's output and provides
for a pass-through of fuel, tax and certain other costs.
Genco's rating is constrained by its reliance on a single customer,
the age and low utilisation of its assets and its small scale.
Given the unfavourable policy environment and market conditions for fossil
fuel generation in New York state, Moody's regards it as likely
that the PSA will be terminated or renegotiated on potentially less favorable
terms in 2025 or allowed to lapse in 2028.
NGET, NGG AND NG ESO -- DOWNGRADE AND STABLE OUTLOOK
The downgrade of NGET's and NGG's senior unsecured ratings
to Baa1 from A3 is driven by the downgrade of the consolidated credit
quality of the National Grid group. On a standalone basis,
key financial metrics for each entity are consistent with a higher rating
(weak A2/strong A3) but Moody's does not allow ratings for these transmission
companies to exceed the rating agency's assessment of the group's consolidated
credit quality at the Baa1 rating level. Regulatory restrictions
and ring-fencing provisions that apply in their license do not
provide sufficient credit insulation to de-link the ratings at
this level.
Despite a tough regulatory determination for the forthcoming RIIO-T2
price controls and a likely reduction in operating cash flows from April
2021, Moody's expects that both companies will maintain significant
headroom to minimum adjusted interest coverage ratios (AICR) for the Baa1
rating of at least 1.4x. This reflects their solid financial
profile with relatively low leverage and borrowing costs, compared
to both regulatory assumptions and other energy networks in Great Britain.
NGG's AICR metrics will be supported by the continuing receipt of early
termination payments from energy suppliers for the replacement of NGG's
domestic gas meters with smart meters given the roll-out now appears
unlikely to be completed before 2025.
The downgrade of NG ESO to Baa1 from A3 is also tied to the downgrade
of National Grid plc. From 1 April, and the start of a new
two-year regulatory period, NG ESO will benefit from greater
cash flow predictability, with the removal of exposure to new timing
differences on network charges -- likely to be almost GBP80 million
in FY2021, around 35% of regulated asset value (RAV),
which will be recovered in FY2023. Whilst NG ESO has adequate liquidity,
Moody's believes the size and terms of its existing Revolving Credit
Facility benefits from its ownership by the National Grid group.
The stable outlook on all three entities is tied to that on National Grid
plc.
BOSTON GAS, MECO and NECO -- DOWNGRADE AND STABLE
OUTLOOK
The downgrade of Boston Gas, MECO and NECO reflects the deterioration
in Moody's downgrade of the consolidated credit quality of the National
Grid group which currently acts as a cap on their ratings. Moody's
considers on a standalone basis that MECO and NECO will meet minimum guidance
for an A3 rating (CFO pre-WC/debt at least in the high teens in
percentage terms).
The cap reflects the substantial additional debt at the parent holding
companies, NG USA and NGNA, and the absence of significant
ring-fencing provisions. The dividend lock-up for
Boston Gas, MECO and NECO only applies if their debt to capitalization
will exceed 70% - a level much higher than for the group's
New York utilities (in the mid-50s in percentage terms).
Although National Grid manages its financing and liquidity on a group
basis, Moody's considers the linkages for its US subsidiaries to
be greater than for its UK subsidiaries. None of the group's
US subsidiaries have revolving credit facilities in their own names.
Short-term liquidity requirements are managed via the group's regulated
money pool.
NECO's ratings are supported by the diversification of its revenues
between distribution and transmission, its stable and predictable
cash flows, and the generally supportive regulatory environment
in Rhode Island.
MECO's ratings benefit from the low business risk of electricity
distribution and a regulatory environment in Massachusetts that has become
more supportive in recent years, evidenced in MECO's performance-based
rate plan approved in 2019 under which the company earnt an ROE of 10.3%
in FY2020. MECO has increased cash flow visibility for a further
3.5 years under the primary term of this rate plan. The
downgrade of the notes issued by Nantucket Electric Company reflect that
MECO guarantees this debt.
Boston Gas's ratings are supported by the low business risk of gas
distribution and supportive regulatory environment in Massachusetts.
Moody's expects additional credit supportive provisions to be included
in these businesses next rate plan (Boston Gas comprises Boston Gas and
its smaller sister company Colonial Gas Company following a merger in
2020), in particular a performance-based rate plan similar
to MECO's. National Grid filed for new rates in November
2020 with a decision expected in late September 2021.
NEP -- AFFIRMATION AND MAINTENANCE OF STABLE OUTLOOK
Affirmation of NEP's A3 issuer rating reflects Moody's expectation
that NEP will continue to have the strongest financial profile of the
group's US subsidiaries and maintain Funds From Operation (FFO)
to Net Debt at least in the mid twenties in percentage terms, well
above minimum guidance for the assigned rating. Moody's expects
that NEP's cash flows will continue to benefit from (1) authorized
returns (10.57% currently) significantly above the group's
other state regulated utilities and earning these returns on the on a
much larger proportion of its regulatory capital structure (66%
compared to around 50%); and (2) achieving an ROE slightly
above authorized levels through performance on incentive adders.
It is the persistence of a much stronger financial profile that means
NEP's ratings can pierce the consolidate credit quality of the group
despite the absence of significant ring-fencing provisions,
with dividend lock-up arrangements identical to those for MECO
and NECO.
NEP's A3 rating also benefits from the very low business risk of electricity
transmission, the Federal Energy Regulatory Commission's well-established
and transparent regulatory framework, and a tariff formula that
allows for the timely recovery of operating and capital spending.
KEDNY -- NEGATIVE OUTLOOK AND AFFIRMATION
Moody's decision to change the outlook to negative on KEDNY reflects
(1) the deterioration in the credit quality of the consolidated National
Grid group because KEDNY's rating is currently supported by its
membership of National Grid group; and (2) uncertainty that it will
meet minimum guidance for the Baa1 rating of CFO pre-WC / debt
of 15% given the protracted settlement discussions in New York.
Affirmation of the Baa1 senior unsecured ratings of KEDNY reflects the
low business risk of gas distribution, and the transparent and established
regulatory framework in New York State, which historically provided
generally stable and predictable cash flow.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Although not currently anticipated under the company's strategy
and updated financial policy, upward pressure on the ratings of
National Grid plc and NGG Finance plc would develop if RCF / Net Debt
appeared likely to be comfortably and sustainably, i.e.
excluding the impact of timing differences, above 9%.
The ratings could be downgraded if RCF/Net Debt appeared likely to persistently
fall short of 7%. Moody's notes these minimum thresholds
may be tightened if (1) the challenging operating environment in the New
York is reflected in forthcoming regulatory determination in the state;
or (2) there is faster than expected shift in the group's earnings
towards the US because Moody's views these as being of lower quality
than those from UK transmission.
Because the ratings of NGNA and NG USA are now tied to those of National
Grid plc, neither upward or downward rating pressure is currently
anticipated. Given NGNA and NG USA are intermediate holding companies,
Moody's considers their rating to be capped at the level of National
Grid plc, the ultimate holding company of the group. Upward
rating pressure on Genco's rating is not expected given Moody's
assessment that its standalone credit quality is weaker than that of NGNA
and NG USA. Downward rating pressure would arise if LIPA terminated
early the Power Supply Agreement (PSA) and Genco did not provide a clear
plan to retire outstanding debt.
Upward rating pressure on NGET, NGG, NG ESO, Boston
Gas, MECO and NECO is not currently expected because in all cases
this would require an upgrade of the consolidated credit quality of the
group unless Moody's changed its approach to allow ratings to pierce
those of the group. Moody's expects on a standalone basis,
NGET and NGG would comfortably meet minimum guidance for an upgrade to
A3 of AICR above 1.6x and Net Debt / RAV below 68%.
On a standalone basis, Boston Gas, MECO and NECO would need
to meet CFO pre-WC/debt at least in the high teens in percentage
terms for an upgrade to A3.
Moody's notes with the growing shift in regulated assets and earnings
in the US, the consolidated credit quality of the group may act
as less of a cap on the ratings of UK and US operating subsidiaries going
forward. This reflects that National Grid's operating subsidiaries
are typically geared at or very close to regulatory determinations,
particularly in the US, and we expect this will continue given that
the regulatory frameworks contain disincentives for gearing substantially
above these levels (tax clawback mechanisms in the UK; likely reductions
in equity layer in future rate case authorisations in the US).
Given that the group's sizeable investment programme in the US acts
as a drain on free cash flow which, in turn, reduces distribution
capacity if regulatory gearing assumptions are to be maintained,
Moody's expects that the group's UK businesses will continue
to be the larger provider of distributions up to the parent.
Upward rating pressure on NEP is not currently expected given that it
would require an upgrade of the consolidated credit quality of the group.
The outlook on KEDNY could be stabilized if, following publication
of the joint proposal for its forthcoming rate plan, the company
were expected to exhibit CFO pre-WC / debt of at least 15%
on average over the primary term. Downward rating pressure would
occur if either (1) KEDNY were not expected to achieve this; (2)
KEDNY did not secure a multi-year rate case settlement; or
(3) there were further adverse political developments that impacted the
regulatory framework.
The principal methodology used in rating Boston Gas Company, Colonial
Gas Company, KeySpan Corporation, Nantucket Electric Company,
Massachusetts Electric Company, Narragansett Electric Company,
National Grid Electricity System Operator Ltd, National Grid North
America Inc., National Grid USA, NGG Finance plc,
Brooklyn Union Gas Company, The, and National Grid plc was
Regulated Electric and Gas Utilities published in June 2017 and available
at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1072530.
The principal methodology used in rating National Grid Electricity Transmission
plc, National Grid Gas plc, British Transco International
Finance B.V., and New England Power Company was Regulated
Electric and Gas Networks published in March 2017 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1059225.
The principal methodology used in rating National Grid Generation LLC
was Unregulated Utilities and Unregulated Power Companies published in
May 2017 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1066389.
Alternatively, please see the Rating Methodologies page on www.moodys.com
for a copy of these methodologies.
The National Grid group owns a range of largely regulated businesses focusing
on the electricity and gas transmission networks in the UK and transmission
and distribution utilities in the US. The company reported total
revenue of GBP14.5 billion in 2019-20 and total regulated
and other assets of GBP45.2 billion as of 31 March 2020.
In the UK, National Grid Electricity Transmission plc owns the high-voltage
electricity transmission network in England and Wales and National Grid
Electricity System Operator Ltd operates the system across Great Britain.
National Grid Gas plc owns and operates the high pressure gas transmission
system in Britain. In the US, via subsidiaries of National
Grid North America Inc., National Grid distributes electricity
to 3.4 million customers in Massachusetts, Rhode Island and
upstate New York and gas to 3.6 million customers in upstate New
York, New York City, Long Island, Massachusetts and
Rhode Island. National Grid also has a number of related businesses
that operate outside of traditional regulatory price controls, such
as electricity generation, liquefied natural gas importation and
storage, interconnectors, property and metering.
LIST OF AFFECTED RATINGS
..Issuer: Boston Gas Company
.... Long-term Issuer Rating (Local
Currency), Downgraded to Baa1 from A3
....Long-term Senior Unsecured Regular
Bond/Debenture (Local Currency), Downgraded to Baa1 from A3
....Outlook, Changed To Stable From
Negative
..Issuer: Colonial Gas Company
....Long-term Senior Secured First
Mortgage Bonds (Local Currency), Downgraded to A2 from A1 (Assumed
by Boston Gas Company)
....Long-term Senior Unsecured Regular
Bond/Debenture (Local Currency), Downgraded to Baa1 from A3 (Assumed
by Boston Gas Company)
..Issuer: KeySpan Corporation
....Long-term Senior Unsecured Regular
Bond/Debenture (Local Currency), Downgraded to Baa2 from Baa1 (Assumed
by National Grid USA)
..Issuer: Nantucket Electric Company
....Long-term Senior Unsecured Revenue
Bonds (Local Currency), Downgraded to Baa1 from A3
..Issuer: Massachusetts Electric Company
.... Long-term Issuer Rating,
Downgraded to Baa1 from A3
....Long-term Pref. Stock Preferred
Stock (Local Currency), Downgraded to Baa3 from Baa2
....Long-term Senior Unsecured Regular
Bond/Debenture (Local Currency), Downgraded to Baa1 from A3
....Outlook, Changed To Stable From
Negative
..Issuer: Narragansett Electric Company
.... Long-term Issuer Rating,
Downgraded to Baa1 from A3
....Long-term Pref. Stock Preferred
Stock (Local Currency), Downgraded to Baa3 from Baa2
....Long-term Senior Unsecured Regular
Bond/Debenture (Local Currency), Downgraded to Baa1 from A3
....Outlook, Changed To Stable From
Negative
Issuer: National Grid Electricity System Operator Ltd
.... Long-term Issuer Rating (Local
Currency), Downgraded to Baa1 from A3
....Outlook, Changed To Stable From
Negative
..Issuer: National Grid North America Inc.
.... Long-term Issuer Rating (Local
Currency), Downgraded to Baa2 from Baa1
....Short-term Issuer Rating (Local
Currency), Affirmed P-2
....Long-term Senior Unsecured Medium-Term
Note Program (Foreign Currency), Downgraded to (P)Baa2 from (P)Baa1
....Long-term Senior Unsecured Regular
Bond/Debenture (Local and Foreign Currency), Downgraded to Baa2
from Baa1
.... Commercial Paper (Local and Foreign Currency),
Affirmed P-2
....Outlook, Changed To Stable From
Negative
..Issuer: National Grid USA
.... Long-term Issuer Rating (Local
Currency), Downgraded to Baa2 from Baa1
.... Commercial Paper (Local Currency),
Affirmed P-2
....Outlook, Changed To Stable From
Negative
..Issuer: NGG Finance plc
....Backed Senior Subordinated Regular Bond/Debenture
(Local and Foreign Currency), Downgraded to Ba1 from Baa3
....Outlook, Changed To Stable From
Negative
..Issuer: Brooklyn Union Gas Company, The
.... Long-term Issuer Rating (Local
Currency), Affirmed Baa1
....Long-term Senior Unsecured Regular
Bond/Debenture (Local Currency), Affirmed Baa1
....Outlook, Changed To Negative From
Stable
..Issuer: National Grid plc
.... Long-term Issuer Rating,
Downgraded to Baa2 from Baa1
.... Long-term Senior Unsecured Medium-Term
Note Program (Foreign Currency), Downgraded to (P)Baa2 from (P)Baa1
....Long-term Senior Unsecured Regular
Bond/Debenture (Local and Foreign Currency), Downgraded to Baa2
from Baa1
....Long-term Senior Unsecured Shelf
(Foreign Currency), Downgraded to (P)Baa2 from (P)Baa1
.... Commercial Paper (Foreign Currency),
Affirmed P-2
....Other Short Term Medium-Term Note
Program (Foreign Currency), Affirmed (P)P-2
....Outlook, Changed To Stable From
Negative
..Issuer: National Grid Electricity Transmission plc
....Long-term Senior Unsecured Medium-Term
Note Program (Foreign Currency), Downgraded to (P)Baa1 from (P)A3
....Long-term Senior Unsecured Regular
Bond/Debenture (Local and Foreign Currency), Downgraded to Baa1
from A3
.... Long-term Underlying Senior Unsecured Regular Bond/Debenture (Domestic), Downgraded to Baa1 from A3
.... Commercial Paper (Foreign Currency),
Affirmed P-2
....Other Short Term Medium-Term Note
Program (Foreign Currency), Affirmed (P)P-2
....Outlook, Changed To Stable From
Negative
..Issuer: National Grid Gas plc
....Long-term Senior Unsecured Medium-Term
Note Program (Foreign Currency), Downgraded to (P)Baa1 from (P)A3
....Long-term Senior Unsecured Regular
Bond/Debenture (Local and Foreign Currency), Downgraded to Baa1
from A3
....Backed Long-term Senior Unsecured
Regular Bond/Debenture (Local Currency), Downgraded to Baa1 from
A3
....Other Short Term Medium-Term Note
Program (Foreign Currency), Affirmed (P)P-2
....Commercial Paper (Foreign Currency),
Affirmed P-2
....Outlook, Changed To Stable From
Negative
..Issuer: British Transco International Finance B.V.
.... Backed Long-term Senior Unsecured
Regular Bond/Debenture (Foreign Currency), Downgraded to Baa1 from
A3
....Outlook, Changed To Stable From
Negative
..Issuer: New England Power Company
....Long-term Issuer Rating,
Affirmed A3
....Long-term Pref. Stock Preferred
Stock (Local Currency), Affirmed Baa2
....Long-term Senior Unsecured Regular
Bond/Debenture (Local Currency), Affirmed A3
....Outlook, Remains Stable
..Issuer: National Grid Generation LLC
....Long-term Issuer Rating,
Downgraded to Baa2 from Baa1
....Outlook, Changed To Stable From
Negative
REGULATORY DISCLOSURES
For further specification of Moody's key rating assumptions and
sensitivity analysis, see the sections Methodology Assumptions and
Sensitivity to Assumptions in the disclosure form. Moody's
Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.
For ratings issued on a program, series, category/class of
debt or security this announcement provides certain regulatory disclosures
in relation to each rating of a subsequently issued bond or note of the
same series, category/class of debt, security 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 certain
regulatory disclosures in relation to the credit rating action on the
support provider and in relation to each particular credit rating action
for securities that derive their credit ratings from the support provider's
credit rating. For provisional ratings, this announcement
provides certain 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.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
The ratings have been disclosed to the rated entity or its designated
agent(s) and issued with no amendment resulting from that disclosure.
These ratings are solicited. Please refer to Moody's Policy
for Designating and Assigning Unsolicited Credit Ratings available on
its website www.moodys.com.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Moody's general principles for assessing environmental, social
and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1243406.
The Global Scale Credit Rating on this Credit Rating Announcement was
issued by one of Moody's affiliates outside the EU and is endorsed
by Moody's Deutschland GmbH, An der Welle 5, Frankfurt
am Main 60322, Germany, in accordance with Art.4 paragraph
3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies.
Further information on the EU endorsement status and on the Moody's
office that issued the credit rating is available on www.moodys.com.
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.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Philip Cope
Asst Vice President - Analyst
Infrastructure Finance Group
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
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Client Service: 44 20 7772 5454
Douglas Segars, CFA
MD - Infrastructure Finance
Infrastructure Finance Group
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454
Releasing Office:
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
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JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454
