S&P Cuts Rtgs On SP AusNet Group To A- On Parent Cut

The following is a press release from Standard & Poor's:

MELBOURNE (Standard & Poor's) March 31, 2008--Standard & Poor's Ratings Services today said that it had lowered its long-term rating on SP AusNet Group (SP AusNet) and SP AusNet's subsidiaries to 'A-', from 'A', following a downward revision in the credit quality of its majority owner, Singapore Power Ltd. (SingPower; AA-/Negative/--). The ratings outlook on SP AusNet is negative, reflecting the negative outlook on the parent. At the same time, the ratings were removed from CreditWatch with negative implications. The 'A-1' short-term ratings on SPI PowerNet Pty Ltd. and SPI Electricity & Gas Australia Holdings Pty Ltd. were unchanged due to the strong liquidity position of these two entities. All rated credit-wrapped issues of SP AusNet were also unchanged.

The SP AusNet ratings incorporate reasonable benefit from being 51% owned by a stronger rated parent. Although this benefit has weakened slightly following the revision of the rating on SingPower, SP AusNet's inherent business fundamentals, finances, and underlying credit quality remain sound. We note that SP AusNet accounts for a substantial proportion of SingPower's assets and cash flows, and that the parent remains committed to its Australian operations.

"While the negative outlook signifies possible further pressure on the SP AusNet ratings, any further downgrade will depend on the circumstances that lead to the resolution of the negative outlook on SingPower," Standard & Poor's credit analyst Rosalind Poh said.

SP AusNet rated entities affected by the rating action include: SPI Australia Holdings (Partnership) L.P., SPI PowerNet Pty Ltd., SPI Electricity & Gas Australia Holdings Pty Ltd., and SPI Electricity Pty Ltd.