S&P downgrades KeySpan Gas

Standard & Poor’s said it lowered the issuer credit and senior unsecured debt ratings on KeySpan Gas East Corp. to A- from A.

The outlook is stable.

The ratings on parent National Grid North America Inc. are unchanged.

The downgrade on KeySpan is based on the company’s less-effective management of regulatory risk than in the past, S&P said, while consistently earning at levels that are below its authorized returns and contributing to weakening financial performance.

KeySpan Gas East’s financial performance has consistently weakened in recent years, due in part to base rates that have remained largely unchanged since the last approved rate case in 2008, the agency said.

At the same time, the company’s capital spending has been increasing to address system integrity and reliability, storm hardening and new customer conversions, S&P said.

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