S&P puts Southwest Gas on developing watch

S&P said it placed all its long-term ratings on Southwest Gas Holdings Inc. (SWX), Southwest Gas Corp. (SWG), and Dominion Energy Questar Pipeline LLC, including the BBB- issuer credit rating on SWX and Questar Pipeline, the BBB- issue-level rating on Questar Pipeline's senior unsecured debt, the BBB issuer credit rating on SWG, and the BBB issue-level rating on SWG's senior unsecured debt on CreditWatch with developing implications.

SWX plans to separate from its utility infrastructure services business under its Centuri Group Inc. subsidiary.

“The separation of this higher-risk business could lower consolidated business risk, but its credit profile remains strained as it has yet to complete its planned large equity issuance to partially repay the short-term debt incurred in acquiring Questar Pipeline,” S&P said in a press release.

The developing watch reflects the planned separation of Centuri and the uncertainty around the separation strategy, in addition to the capital structure of the SWX group, the ownership and capital structure of Centuri, and the ongoing execution risk associated with the company's large equity issuance, the agency said.

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