(The following statement was released by the rating agency)
Sept 24 - Standard & Poor's Ratings Services today said that
it had lowered its corporate credit ratings on Multinet Group
Holding Pty Ltd.'s (MGH) finance company Energy Partnership (Gas)
Pty Ltd. (EPG) to 'BBB-' from 'BBB'. The ratings outlook is
stable. At the same time, we affirmed our 'BBB-' corporate credit
rating and stable outlook on DUET Group (DUE.AX) (DUET).
"The downgrade reflects MGH's weaker credit-protection
metrics and the absence of a capital restructure to support the
group's financial profile," Standard & Poor's credit analyst
Richard Creed said. "We consider that EPG continues to be weak
for the 'BBB-' rating, given that MGH has minimum flexibility on
its capital expenditure. The stable outlook on EPG is contingent
on MGH meeting our revised expectations of financial performance.
Moreover, we expect MGH to undertake financial management to
strengthen its creditworthiness by steadily reducing its reliance
on debt."
EPG's lower rating also represents a continued weakening in
the credit quality of DUET's underlying assets over the past 12
months. Subsequently, our tolerance for any further
underperformance from the rest of DUET's asset portfolio is
increasingly limited. The 'BBB-' rating on DUET could be at
risk if the credit quality of its underlying asset companies
weakens further, particularly at United Energy Distribution
Holdings Pty Ltd. (BBB/Negative/--) or DBNGP Trust
(BBB-/Negative/--), whose negative outlooks mainly reflect issues
related to the timing and nature of funding for expansion capital
projects. For the present, however, the rating and outlook on
DUET remain unchanged, largely because of the group's diverse
portfolio of assets and the modest proportion of cash flow that
EPG contributes to DUET's overall cash flow receipts.
