APA GROUP — Capital/Financing Update 2010

Apr 28, 2010

==> picture [584 x 96] intentionally omitted <==

ASX RELEASE 29 April 2010

The Manager

Company Announcements Office Australian Securities Exchange 4[th] Floor, 20 Bridge Street Sydney NSW 2000

Electronic Lodgement

Dear Sir or Madam

Company Announcement

I attach the following announcement for release to the market:

• APA Group assigned credit rating by Moody’s

Yours sincerely

==> picture [163 x 38] intentionally omitted <==

Mark Knapman Company Secretary

==> picture [588 x 99] intentionally omitted <==

ASX Release

29 April 2010

APA Group assigned credit rating by Moody’s

APA Group (APA) has been advised that Moody’s Rating Services has assigned a Baa2 corporate credit rating (outlook stable) to APT Pipelines Ltd, the borrowing entity of APA.

This is APA’s second credit rating and is equivalent to its initial credit rating of BBB (stable) issued by Standard & Poor’s in June 2009.

APA Chief Financial Officer Peter Fredricson said the Moody’s rating was additional confirmation of APA’s standing as an investment grade company.

“This credit rating, together with the rating from Standard & Poor’s enables APA to further pursue our stated capital management strategy of accessing a broader range of offshore debt capital markets than has historically been available to the company,” he said.

“It is encouraging to note that during the past six months, all of the markets that we will now look to access have seen significant increases in liquidity and reductions in borrowing margins, relative to this time last year. This second credit rating and improved market conditions gives APA greater flexibility in meeting its future refinancing needs.”

He also said it was pleasing to see that Moody’s recognised the strengths of APA's business in noting “APA’s strong business profile attributed to the stable cash flow from the diversified portfolio which it owns and operates”.

A copy of Moody’s media release is attached.

For further information please contact:

Investor	enquiries:	Media enquiries:
Chris Kotsaris		Matthew Horan
Investor	Relations, APA Group	Cato Counsel
Tel:	(02) 9693 0049	Tel: (02) 9212 4666
Mob:	0402 060 508	Mob: 0403 934 958
Email:	chris.kotsaris@apa.com.au	Email: matthew@catocounsel.com.au

About APA Group (APA)

APA Group (ASX: APA) is Australia’s largest natural gas infrastructure business, owning and/or operating more than $8 billion of gas transmission and distribution assets. Its pipelines span every state and territory in mainland Australia, delivering more than 50% of the nation’s gas usage. Unique among its peers, APA has direct management and operational control over its assets and investments. APA also holds minority interests in energy infrastructure enterprises including Envestra, SEA Gas Pipeline and Energy Infrastructure Investments (EII). For more information visit APA’s website www.apa.com.au.

==> picture [104 x 32] intentionally omitted <==

Rating Action: Moody's assigns Baa2 rating to APA Group

Global Credit Research - 29 Apr 2010

Sydney, April 29, 2010 -- Moody's Investors Service has today assigned Baa2 issuer and short-term ratings of P-2 to APT Pipelines Ltd. The outlook on the issuer rating is stable. The Baa2 rating of APT Pipelines reflects the credit profile of APA Group, given the guarantee structure in place between APT Pipelines and an APA obligor group.

This is the first time Moody's has assigned a rating to APT Pipelines Ltd, the financing vehicle of the APA Group.

"The Baa2 rating on APT Pipelines reflects APA's strong business profile, attributed to the stable cash flow from its diversified portfolio of gas pipelines, but which is counterbalanced by its leveraged balance sheet and constrains financial flexibility," says Spencer Ng, a Moody's Analyst.

Revenue generated by APA's pipeline assets -- which contribute close to 90% of total revenue -- is either regulated or set by long-term contracts, which supports the company's its stable cash flow. At the same time, the essential nature and strong market position of the group's pipeline assets support the long-term value of these assets and minimise bypass risk.

"The group's integrated transmission network in eastern Australia promotes operating flexibility by facilitating connections across multiple gas fields, while the diversification in its large asset portfolio enhances the group's cash flow and operating stability," adds Ng.

However, APA's financial profile is tempered by its leveraged balance sheet and the thin cushion of its current gearing, in light of covenant levels. Over the next three years, APA will likely achieve an average FFO/Interest of close to 2.0x and FFO/Debt of around 8%.

The debt obligations of APT Pipelines -- the financing vehicle of APA -- are guaranteed by an obligor group that represents more than 90% of the group's total assets and EBITDA contribution.

Additionally, exposure to event risk relating to acquisitions could emerge if the group's financial or business risk profile were to be adversely affected by any material market transactions carried out with aggressive funding structures. In its Baa2 rating, Moody's expects APA to maintain a disciplined approach to acquisitions and to use of a mix of equity and debt in transactions which would result in the financial profile of the group within guidelines Moody's provided for the rating.

A positive trend for APT Pipelines' Baa2 rating could develop over time if APA can achieve the following metrics: FFO/Interest above 2.5x and FFO/Debt above 10%.

However, the rating could be negatively pressured if the company's financial performance were to disappoint, as indicated by FFO/Interest under 1.7x and FFO/Debt under 5%.

The principal methodology used in rating this issuer was the Regulated Electric and Gas Networks methodology, published in August 2009, and available on www.moodys.com in the Rating Methodologies sub-directory under the Research & Ratings tab. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Rating Methodologies sub-directory on Moody's website.

APT Pipelines Ltd is the financing vehicle and wholly owned subsidiary of the gas infrastructure entity APA Group. Listed on the Australian Stock Exchange, APA Group is the largest owner of gas transmission and distribution assets in Australia, with a portfolio of pipelines and networks that consists of more than 25 assets.

Sydney Spencer Ng Analyst Infrastructure Finance Group Moody's Investors Service Pty Ltd JOURNALISTS: (612) 9270-8102 SUBSCRIBERS: (612) 9270-8100

Sydney Terry Fanous Senior Vice President Infrastructure Finance Group Moody's Investors Service Pty Ltd JOURNALISTS: (612) 9270-8102 SUBSCRIBERS: (612) 9270-8100

==> picture [104 x 32] intentionally omitted <==

© Copyright 2010, Moody's Investors Service, Inc. and/or its licensors including Moody's Assurance Company, Inc. (together, "MOODY'S"). All rights reserved.

CREDIT RATINGS ARE MOODY'S INVESTORS SERVICE, INC.'S ("MIS") CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MIS DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS DO NOT CONSTITUTE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS ARE NOT RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. CREDIT RATINGS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MIS ISSUES ITS CREDIT RATINGS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. Under no circumstances shall MOODY'S have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error (negligent or otherwise) or other circumstance or contingency within or outside the control of MOODY'S or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if MOODY'S is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The ratings, financial reporting analysis, projections, and other observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. Each user of the information contained herein must make its own study and evaluation of each security it may consider purchasing, holding or selling. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER.

MIS, a wholly-owned credit rating agency subsidiary of MOODY'S Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MIS have, prior to assignment of any rating, agreed to pay to MIS for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS's ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS

and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading "Shareholder Relations - Corporate Governance - Director and Shareholder Affiliation Policy."

Any publication into Australia of this Document is by MOODY'S affiliate MOODY'S Investors Service Pty Limited ABN 61 003 399 657, which holds Australian Financial Services License no. 336969. This document is intended to be provided only to wholesale clients (within the meaning of section 761G of the Corporations Act 2001). By continuing to access this Document from within Australia, you represent to MOODY'S and its affiliates that you are, or are accessing the Document as a representative of, a wholesale client and that neither you nor the entity you represent will directly or indirectly disseminate this Document or its contents to retail clients (within the meaning of section 761G of the Corporations Act 2001).