Fitch Affirms Nicor Inc, Nicor Gas L-T Ratings; Revises S-T Rating.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. affirms Nicor Inc.'s (Nicor) and Nicor Gas Co.'s (Nicor Gas) long-term Issuer Default Ratings (IDR IDR In currencies, this is the abbreviation for the Indonesian Rupiah. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) at 'A' and revises Nicor Gas's short-term IDR and commercial paper rating to 'F1' from 'F1+'. A full listing of ratings can be found below. The Rating Outlooks for both Nicor and Nicor Gas are Stable. The revision of Nicor Gas's short-term ratings reflects a revision by Fitch in short-term and long-term rating linkage practices which now excludes loss severity analysis from short-term ratings assigned to instruments. The short-term rating revision does not reflect any change in the credit profile of Nicor Gas. Please see Fitch publication 'Short Term Ratings Criteria for Corporate Finance' dated June 12, 2007 for a description of Fitch's short-term ratings methodology. The ratings of Nicor are primarily based on the solid credit profile of its natural gas distribution subsidiary, Nicor Gas as well as robust earnings from its Tropical Shipping business. Consolidated credit metrics are strong for the ratings category, with funds from operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. covering interest expense 6.8 times (x), and the ratio of total debt-to-EBITDA at 1.6x for the 12 months ending March 31, 2007. Nicor Gas benefits from stable regulated earnings and cash flow as well as a history of strong operating performance. In 2006 the gas utility accounted for over 60% of consolidated operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. . Rating concerns surrounding Nicor and Nicor Gas primarily relate to possible negative financial implications of an on-going investigation into a performance-based rate (PBR PBR Pre-Budget Report PBR Pabst Blue Ribbon PBR Policy Based Routing PBR Payment by Results (UK hospital funding) PBR Permit by Rule PBR Plant Breeder's Rights PBR Performance Based Ratemaking PBR Partition Boot Record ) plan that was in place at Nicor Gas from 2000 through 2002, as well as the heightened political and regulatory risk in Illinois. Nicor's second largest business Tropical Shipping, a containerized con·tain·er·ize v.tr. con·tain·er·ized, con·tain·er·iz·ing, con·tain·er·iz·es 1. To package (cargo) in large standardized containers for efficient shipping and handling. 2. freight transportation company, accounts for approximately 25% of operating income. Tropical Shipping is consistently profitable and generates excess cash and benefits from a strong market position as the largest shipper in many of the markets it serves. While earnings at Tropical are expected to remain steady in the near term, the segment remains highly exposed to economic cyclicality. NICOR Inc. owns Nicor Gas Co., a natural gas local distribution company, and Tropical Shipping, an ocean transport services The collective functions of layers 1 through 4 of the OSI model. provider in the Caribbean. Nicor also owns non-regulated energy related entities including asset-backed energy ventures, storage and transmission services, wholesale gas marketing and the Horizon Pipeline, as well as retail energy-related products and services. Revised Ratings: Nicor Gas Co. --Short-term IDR to 'F1' from 'F1+'; --Commercial paper to 'F1' from 'F1+'. Affirmed Ratings: Nicor Inc. --IDR 'A'; --Senior unsecured 'A'; --Trust preferred 'A-'; --Short-term IDR 'F1'; --Commercial paper 'F1'. Nicor Gas Co. --IDR 'A'; --Senior secured 'AA-'; --Senior unsecured 'A+'. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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