AGL Capital's $225MM Senior Notes Rated 'A-' by Fitch Ratings.

Business Editors

NEW YORK--(BUSINESS WIRE)--June 27, 2003

AGL Capital Corp.'s (AGCC) $225 million 4.45% senior notes, due 2013, are rated 'A-' by Fitch Ratings. The notes are fully and unconditionally guaranteed by AGL Resources, Inc. (AGLR; 'A-' indicative senior unsecured rating). The Rating Outlook is Stable. Proceeds from the new senior notes are expected to be used for general corporate purposes including the repayment of short-term debt at AGCC and long-term debt at wholly owned subsidiary Atlanta Gas Light Co. (AGLC; 'A' senior unsecured debt).

The rating reflects the low business risk profile of AGLR's core regulated gas distribution business and management's favorable track record of operating and investing in a modest sized portfolio of non-regulated businesses. Considerable credit strength is derived from AGLR's stable regulated gas distribution operations which serve more than 1.9 million customers throughout Georgia, southeastern Virginia, and a small portion of Tennessee. These operations represented approximately 90% of 2002 operating income. AGLC ('A' senior unsecured debt rating), AGLR's largest subsidiary, is expected to remain a strong cash flow contributor to AGLR given its robust service territory economics, track record of profitable expansion and stable earnings stream following the full unbundling of the gas industry in Georgia. As a pure energy delivery company, AGLC operates under volume-insensitive straight-fixed variable rates. Accordingly, changes in customer usage patterns due to weather and improvements in equipment efficiencies or other business conditions now have minimal financial impact. The recent adoption of a two-year weather normalization rate structure in AGLR's Virginia jurisdiction should provide further stability to near-term gas distribution segment performance.

AGLR's non-regulated business strategy is focused primarily on energy related investments and fiber optic services. Capital spending in these areas has been relatively modest and has not resulted in incremental debt leverage at the parent company level. Importantly, non-regulated activities have generated economic value for AGLR in the form of cash dividends and/or earnings. During 2001 AGLR launched a natural gas marketing and trading initiative focused on the Southeast region. Fitch has reviewed AGLR's energy trading unit in Houston (Sequent Energy Management) and found its business practices and risk control policies to be of good quality and consistent with the company's strategy of managing and optimizing excess upstream pipeline capacity and natural gas supply on behalf of AGLR's utility affiliates.

The issuance of $141 million of new common equity in February 2003 has accelerated an improvement in AGLR's consolidated credit profile which had been under moderate pressure since the 2000 acquisition of Virginia Natural Gas (VNG). This factor combined with synergistic cost savings resulting from the successful integration of VNG has restored consolidated credit measures to levels consistent with the 'A-' category. For the fiscal year ended Dec. 31, 2002, AGLR's debt to capitalization ratio approximated 56% with cash flow coverage of fixed charges of about 4.0 times (x). After factoring in the equity issuance, AGLR's consolidated leverage should drop to below 50% by year-end 2003 with cash flow to fixed charges improving to approximately 4.5x. Another positive factor is AGLR's strong liquidity position. In particular, AGLR has demonstrated consistent access to bank and commercial paper markets and is not faced with significant long-term debt maturities over the next several years.