Research Update: Southwest Gas Corp. Upgraded To 'A-' On Criteria Review; Negative Outlook Reflects Parent's Weakening Credit Quality

On July 1, 2019, we published our revised Group Rating Methodology criteria and placed our ratings on Southwest Gas Corp. (SWG) under criteria observation. Following our criteria review, we established that the cumulative value of SWG's structural protections vis-à-vis parent Southwest Gas Holdings Inc. (SWX) are sufficient to insulate our issuer credit rating from SWX's credit profile. We are raising our issuer credit rating on SWG to 'A-' from 'BBB+' and removing all of our ratings on the company from criteria observation. At the same time, we are raising our issue-level ratings on SWG's senior unsecured notes to 'A-' from 'BBB+'. The outlook is negative. We are affirming our ratings on SWX and revising our assessment of its financial risk

...- On July 1, 2019, we published our revised Group Rating Methodology criteria and placed our ratings on Southwest Gas Corp. (SWG) under criteria observation. - Following our criteria review, we established that the cumulative value of SWG's structural protections vis-a-vis parent Southwest Gas Holdings Inc. (SWX) are sufficient to insulate our issuer credit rating from SWX's credit profile. - We are raising our issuer credit rating on SWG to 'A-' from '###+' and removing all of our ratings on the company from criteria observation. At the same time, we are raising our issue-level ratings on SWG's senior unsecured notes to 'A-' from '###+'. The outlook is negative. - We are affirming our ratings on SWX and revising our assessment of its financial risk profile to significant from intermediate as we expect funds from operations (FFO) to debt to moderately weaken to 19%-20% from 2019-2021. - The negative outlook largely reflects the potential for weaker financial measures beyond 2021, driven...

Research Update