AGL Resources Sr. Unsec. Upgraded to 'A-' by Fitch Ratings.

Business Editors

NEW YORK--(BUSINESS WIRE)--Feb. 14, 2003

Fitch Ratings has upgraded the senior unsecured debt ratings of AGL Resources, Inc. (AGLR) and its financing subsidiary AGL Capital Corp. (AGCC) to 'A-' from 'BBB+'. The ratings are removed from Rating Watch Positive where they were placed on February 11, 2003. The Rating Outlook is Stable. A complete list of securities impacted by today's action is provided below.

The rating action reflects the anticipated de-leveraging and improvement in consolidated coverage ratios resulting from AGLR's recent issuance of $137 million of net new common equity, proceeds of which will be used to retire short-term debt. In addition, the revised rating levels incorporate 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 1.8 million customers throughout Georgia, southeastern Virginia, and a small portion of Tennessee. These operations represented approximately 90% of 2002 operating income. Atlanta Gas Light Co. (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 recently 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 pending equity issuance will accelerate an improvement in AGLR's consolidated credit profile which has 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 will restore consolidated credit measures to levels consistent with the 'A-' category. For the fiscal year ended 12/31/02, 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.

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

AGL Resources, Inc.

-- Senior unsecured debt rating to 'A-' from 'BBB+';

-- $75 million trust preferred securities (issued by AGL Capital

Trust I) to 'BBB+' from 'BBB'.

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

-- $300 million senior notes to 'A-' from 'BBB+';

-- $225 million trust preferred securities (issued by AGL Capital Trust II) to 'BBB+' from 'BBB'.