AGL Resources Affirmed at 'A-' by Fitch; Outlook Stable.

NEW YORK -- Fitch Ratings has affirmed at 'A-' the outstanding credit ratings of AGL Resources, Inc. (AGLR) and its two debt issuing subsidiaries Atlanta Gas Light Co. (AGLC) and AGL Capital Corp.(AGCC), as listed below. The ratings are removed from Rating Watch Negative where they were placed on July 15, 2004 following AGLR's announced intention to acquire New Jersey based NUI Corp. The Rating Outlook is Stable.

The rating action follows Fitch's analysis of AGLR's pending acquisition of the outstanding common stock of NUI for $220 million cash, plus the assumption of outstanding net debt (approximately $500 million as of June 30, 2004). On Nov. 18, 2004, AGLR priced approximately $300 million of new common stock, proceeds of which will be utilized to fund the cash component and repay short-term debt. In addition, AGLR plans to access the debt capital and commercial paper markets at or around closing to refinance NUI's outstanding credit facilities. Following completion of its financing plans, external debt remaining at NUI will consist of approximately $200 million of long-term revenue bonds at the NUI Utilities subsidiary level. AGLR has received all necessary state regulatory approvals for the acquisition, including the New Jersey Board of Public Utilities (BPU). The transaction remains subject to SEC approval and is expected to close by Dec. 31, 2004.

The affirmation of AGLR's outstanding credit ratings reflects reduced execution risk, resulting from the aforementioned common equity offering, the low risk profile of AGLR's core gas distribution operations, and the expectation that post acquisition credit measures will remain consistent with targets for the current rating category. In addition, NUI has closed down and/or divested most remaining nonregulated businesses and effectively resolved significant regulatory and legal investigations faced by the company, including the BPU Focused Audit and investigation of NUI Energy Brokers by the New Jersey Attorney General. The current rating and Rating Outlook assumes that all remaining legal issues, including an ongoing informal investigation of NUI Energy Brokers, will not have a material adverse affect on AGLR's overall credit profile.

Considerable credit strength is derived from AGLR's low risk gas distribution operations, which are expected to contribute in excess of 85% of consolidated earnings and cash flow on a pro forma basis. In particular, AGLR's gas utility operations should continue to exhibit minimal ongoing cash flow volatility given AGLC's straight-fixed-variable rate design and weather-normalized rate structures at Virginia Natural Gas and NUI's Elizabethtown Gas division. Fitch notes that NUI Utilities, which serves approximately 370,000 customers primarily in New Jersey and Florida, have maintained consistent performance despite the significant liquidity and regulatory challenges experienced at the NUI parent level over the course of 2003 and 2004.

Although consolidated credit protection measures are expected to moderately weaken following the acquisition, due to the impact of the assumed NUI debt, prospective ratios remain in line with parameters for the current 'A-' rating. Fitch notes that AGLR's credit metrics in recent years have exceeded expectations for the rating category due to the deleveraging impact of a 2003 equity offering, lower interest expense resulting from the ongoing refinancing of higher coupon debt, and improved performance of AGLR's Georgia based retail gas marketing business. Following completion of the NUI acquisition, Fitch expects cash flow coverage of interest to range above 4.0 times (x) with debt leverage, as measured by total adjusted debt to EBITDA in the low 3.0x range.

The affirmation of AGLC's rating reflects its stable individual credit profile, combined with the expectation that its current business profile, capital structure, and dividend policy will remain unchanged following the acquisition of NUI. AGLC's stand-alone credit ratios have strengthened in recent years due to the ongoing refinancing of maturing debt obligations at the AGLR level. However, AGLC's rating is constrained due to its financial ties with AGLR. Affiliated companies, including AGLC, participate in a corporate money pool arrangement at AGLR. Furthermore, the Georgia regulatory framework does not provide a strong ring-fence limiting AGLC's ability to upstream dividends and/or excess cash flow to AGLR.

The following is a summary of outstanding ratings affected by today's action:

AGL Resources, Inc.

-- Senior unsecured debt 'A-';

-- $75 million trust preferred securities 'BBB+' (issued by AGL Capital Trust I).

Atlanta Gas Light Co.

-- $241.8 million outstanding medium-term notes 'A'.

AGL Capital Corp (guaranteed by AGL Resources, Inc.)

-- $775 million outstanding senior notes 'A-';

-- $150 million trust-preferred securities 'BBB+';

-- Commercial paper program 'F2'.