TEXT-Moody's on Iroquois Gas Transmission System

(The following statement was released by the rating agency)

Approximately $370 million of debt instruments affected

Sept 11 - Moody's Investors Service today placed Iroquois Gas Transmission
System, L.P.'s ("Iroquois") Baa1 senior unsecured rating under review for
upgrade.
The review for upgrade takes into account Iroquois' progress in the
implementation of its MarketAccess and 08/09 projects (collectively, the
"Expansion Projects"), which will increase the supply optionality for the
pipeline shippers, the steady improvement in its financial metrics since the
Eastchester extension was brought into service in 2004, and its strong
competitive position in the New York market. The MarketAccess project will add
100,000 Dt/d of capacity, contracted to Consolidated Edison for 10 years, and
the 08/09 project will add 200,000 Dt/d of capacity, contracted to KeySpan for
11 years, which will increase the average contract length of the portfolio and
improve the weighted average shipper credit rating. In order to finance the
Expansion Projects, Iroquois will raise $140 million of debt via a private
placement, which will rank pari passu with the existing $370 million of Senior
Notes. Iroquois expects to have placed 275,000 Dt/d of the 300,000 Dt/d of the
new capacity into service in January, 2009, at which time Moody's intends to
conclude its review.
The last rating action was on June 23, 2004 when Moody's downgraded the senior
unsecured debt rating of Iroquois to Baa1 from A3 as a result of cost and
schedule overruns related to the Eastchester extension, and a concern with
respect to the weakening of the credit quality of the shippers.
Debt list:
8.68% Senior unsecured debenture due April 30, 2010: $200 million
6.1% Senior unsecured debenture due October 31, 2027: $170 million
Iroquois owns and operates a 411 mile interstate natural gas transmission
pipeline that extends from the Canada-United States border through the states
of New York and Connecticut to serve Long Island (terminal at South Commack)
and New York City (terminal at Hunts Point, in the Bronx). Iroquois is
headquartered in Shelton, Connecticut.
(New York Ratings Team)