Fitch rates Keyspan notes A

Fitch Ratings said it assigned a rating of A to Keyspan Gas East Corp.'s $500 million of 5.819% senior notes due April 1, 2041.

The outlook is stable.

Proceeds from the notes will be used to finance capital spending needs, refinance debt maturities, reimburse treasury and refinance short-term debt.

The ratings on the company consider low business operating risk due to constructive regulatory mechanisms in New York that allow for full and timely commodity cost recovery through a monthly cost of gas adjustment clause, strong credit metrics supported by stable cash flows and low debt levels, sufficient liquidity and a secure residential customer base that held up fairly well during the economic recession, Fitch said.

The ratings also consider regulatory uncertainty in 2012 when Keyspan's five-year rate plan expires and risks of rising operating costs during the remaining two years of frozen rates under the current plan, the agency said.

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