The downgrade follows Tuesday’s announcement by Auckland network company Vector that it had completed its purchase of AGL’s 66.05% shareholding in NGC shares, and reflects the creditworthiness of its new majority owner.

Vector’s BBB+ long-term corporate credit rating also remains on CreditWatch, while NGC’s A-2 short-term rating has been confirmed.

"The CreditWatches on Vector and NGC will be resolved once Vector’s full takeover offer of NGC is complete and acquisition funding successfully raised," Standard & Poor's corporate & infrastructure ratings director Ian Greer said from Melbourne.

The ratings on NGC reflected the company’s strong market position in gas transmission and distribution and diversified revenue base.

But the strengths were offset by uncertainty over the changing state of the New Zealand gas market, and uncertainties associated with the current regulatory review of gas transportation, as well as the company’s moderate financial profile and the creditworthiness of its major shareholder, Vector.

Vector’s ratings reflected the company's low-risk electricity network business, the scale and diversity of its operations, its robust service area, and current regulatory price path certainty. These strengths were offset by the company's moderate financial profile.