The Dec. 7, 2010, CreditWatch placement of Nicor Inc. and Nicor Gas Co. followed AGL Resources Inc.'s announcement that it plans to acquire Nicor. AGL plans to fund its $2.4 billion acquisition ($3.1 billion in terms of enterprise value) of Nicor with roughly 40% debt and 60% equity. Based on our calculated pro forma credit metrics, we would expect that the new company's corporate credit rating would be no lower than 'BBB+' when the acquisition closes. Although AGL will fund the transaction with roughly 60% equity, we expect that pro forma credit metrics will be somewhat worse than AGL's current metrics and materially worse than Nicor's. We expect to use a consolidated ratings approach on the new company and will...
Companies mentioned in this report are: Nicor Gas Co.
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