Fitch Rates Municipal Gas Authority of Georgia Gas Revs 'A+'

NEW YORK--(Business Wire)--
Fitch Ratings assigns an 'A+' rating to the Municipal Gas Authority of Georgia's
(the Authority) expected issuance of $100 million of Gas Revenue Portfolio III
bonds (Gas Portfolio III) taxable series F, and affirms the $360 million
outstanding bonds at 'A+' and 'F1+'. The Rating Outlook is Stable.

The bonds are direct and general obligations of the Authority and will refinance
a portion of its outstanding indebtedness incurred for its long-term supply
projects including providing funds to the Public Gas Partners, Inc (PGP), a
joint-action consisting of six members including the Authority.

The rating reflects the Authority's diverse portfolio of long-term gas supply
that includes both prepaid supplies and natural gas reserves and provides
discounts to members in different price environments, timely recovery of costs,
and an experienced management team that has delivered consistent gas services
for over 20 years (including discounts to market prices) to its members. Credit
weaknesses include concentration of retail member sales in industrial loads and
slowing gas sales due to the economic recession. An additional credit concern
includes the above-average proportion of short-term debt that is subject to
regular refinancing risk with relatively low levels of internal liquidity.

Fitch notes that the Authority has increased its funded cash reserves to $40
million from $20 million by restructuring certain long-term supply arrangements.
These funds, together with $65 million of available lines of credit are
currently sufficient to retire one of the staggered $100 million of short-term
obligations (with $100 million of notes coming due every six months once
refinanced in late 2009) should market disruptions prevent debt renewal.

The Authority is the largest natural gas joint action agency and manages
wholesale gas supply for its 76 all-requirements members and nine
partial-requirement partners. All members are local gas distribution systems
owned and operated by their respective cities. The majority (82%) of the members
is located within the State of Georgia and their court-validated obligation is
paid as an operating and maintenance expense and backed by the full faith and
credit of their respective cities, which Fitch considers to be of a generally
strong credit quality.

Fitch's rating definitions and the terms of use 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 are also available from the 'Code of
Conduct' section of this site.

Fitch Ratings, New York
Drake Richey, +1-212-908-0325
Karl Pfeil, +1-212-908-0516
Media Relations:
Cindy Stoller, +1-212-908-0526
cindy.stoller@fitchratings.com

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