Fitch shifts Southwest Gas view to negative

Fitch Ratings said it changed the outlook for Southwest Gas Holdings, Inc. (SWX) to negative from stable following the announcement of an agreement to acquire Riggs Distler & Co., Inc. for $855 million. Southwest Gas Corp.’s (SWG) outlook remains negative.

“SWX's negative outlook reflects the increased business risk due to a large unregulated transaction and higher projected consolidated leverage following the completion of the transaction. Fitch expects to resolve the negative outlook following the closing of the transaction and the integration of the new business. A negative rating action would be warranted if FFO leverage does not improve to less than 4.5x post integration,” the agency said in a press release.

Fitch said it sees FFO leverage following the integration of Riggs Distler to remain at 4.6x-4.8x through 2023, above the negative sensitivity threshold of 4.5x.

The agency also affirmed SWX’s issuer rating at B+ and SWG’s at A-.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.