Research Update: Southwest Gas Holdings And Southwest Gas Corp. Outlooks Revised To Negative On Questar Acquisition, Ratings Affirmed

Southwest Gas Holdings Inc. (SWX) announced that it has reached an agreement to acquire interstate natural gas pipeline Questar Pipeline LLC, which provides services in Utah, Wyoming, and Colorado. The company intends to fund the $1.6 billion acquisition price with the proceeds from a future equity issuance, which we expect to be in the $900 million-$1 billion range, as well as the proceeds from incremental long-term debt of between $600 million and $700 million at SWX. We revised our outlooks on SWX and Southwest Gas Corp. (SWG) to negative from stable. At the same time, we affirmed all of our ratings on SWX and SWG, including our 'BBB-' issuer credit rating on SWX, our 'BBB' issuer credit rating on SWG,

...- Southwest Gas Holdings Inc. (SWX) announced that it has reached an agreement to acquire interstate natural gas pipeline Questar Pipeline LLC, which provides services in Utah, Wyoming, and Colorado. - The company intends to fund the $1.6 billion acquisition price with the proceeds from a future equity issuance, which we expect to be in the $900 million-$1 billion range, as well as the proceeds from incremental long-term debt of between $600 million and $700 million at SWX. - We revised our outlooks on SWX and Southwest Gas Corp. (SWG) to negative from stable. At the same time, we affirmed all of our ratings on SWX and SWG, including our '###-' issuer credit rating on SWX, our '###' issuer credit rating on SWG, and our '###' issue-level rating on SWG's senior unsecured debt. - The negative outlook incorporates the execution risk associated with the company's future equity issuance and decision to fund the initial transaction with short-term debt. If its ultimate funding mix incorporates...

Research Update