Research Update: Southwest Gas Holdings Inc. Downgraded To 'BBB-' On Close Of Subsidiary Acquisition, Outlook Stable

Southwest Gas Holdings Inc.'s (SWX) subsidiary Centuri Group Inc. has completed its acquisition of Riggs Distler&Co. Inc. We believe this acquisition will increase the company's business risk and weaken its financial measures. We downgraded SWX to 'BBB-' from 'BBB+' and its subsidiary Southwest Gas Corp. (SWG) to 'BBB' from 'A-' and removed all of our ratings on the companies from CreditWatch, where we placed them with negative implications on June 29, 2021. At the same time, we lowered our issue-level rating on SWG's senior unsecured debt to 'BBB' from 'A-'. The stable outlook reflects our expectation SWX's construction services business will account for about 40% of its consolidated EBITDA and that its consolidated funds from operations (FFO) to

...- Southwest Gas Holdings Inc.'s (SWX) subsidiary Centuri Group Inc. has completed its acquisition of Riggs Distler & Co. Inc. - We believe this acquisition will increase the company's business risk and weaken its financial measures. - We downgraded SWX to '###-' from '###+' and its subsidiary Southwest Gas Corp. (SWG) to '###' from 'A-' and removed all of our ratings on the companies from CreditWatch, where we placed them with negative implications on June 29, 2021. At the same time, we lowered our issue-level rating on SWG's senior unsecured debt to '###' from 'A-'. - The stable outlook reflects our expectation SWX's construction services business will account for about 40% of its consolidated EBITDA and that its consolidated funds from operations (FFO) to debt will be in the 15%-18% range through 2023....

Research Update