AGL Resources Inc.

-- Issuer Default Rating (IDR) at 'A-'.

AGL Capital Corp. (Guaranteed by AGL)

-- IDR at 'A-';

-- Senior Notes at 'A-';

-- Short-term IDR at 'F2';

-- Commercial paper at 'F2'.

Atlanta Gas Light Co.

-- IDR at 'A-';

-- Medium term notes at 'A'.

AGL's rating and Stable Rating Outlook reflect the low business risk of its core regulated gas distribution business and management's favorable track record of operating and investing in a growing portfolio of non-regulated businesses. AGL's utility operations are supported by beneficial rate design and generally favorable service territory demographics. However, overall customer growth for 2009 is expected to be flat or slightly negative due to a weak residential housing market and recessionary general economy. Furthermore, bad debt expense, also affected by the economy, has modestly increased but remains within acceptable norms.

As a pure energy delivery company, AGLC operates under volume-insensitive straight-fixed variable rates. In addition, the adoption of weather-normalized rates (WNR) and partial rate decoupling for Virginia Natural Gas, Inc. (VNG) and WNR at Elizabethtown Gas Co. (EGC) contributes further to operating stability. In March 2009, EGC filed in New Jersey for a $25 million increase in base rates, revised downward in June to $17 million, and the adoption of a revenue decoupling mechanism. New rates are anticipated to be effective in New Jersey by late 2009-early 2010. Future rate filings are expected to be made in Georgia, Virginia and Tennessee during the next 12 months.

In part to support local economic recovery, EGC and AGLC have proposed making accelerated infrastructure investments in New Jersey and Georgia, respectively. If the company's plans are adopted as conceived, spending will ramp up in 2010. While the increased investment would likely result in higher debt leverage over the near term, regulatory mechanisms should support full recovery.

AGL's non-utility businesses are primarily focused in three areas: retail gas marketing through SouthStar Energy Services LLC (SouthStar), its joint venture with Piedmont Natural Gas Co.; wholesale gas services through Sequent Energy Management, L.P. (Sequent); and investments in high-deliverability natural gas storage and telecommunication networks.