Moody's assigns Centuri, loans Ba2

Moody's Investors Service said it assigned a Ba2 corporate family rating and a Ba2-PD probability of default rating to Centuri Group, Inc. The agency also assigned Ba2 ratings to the company's planned $1.145 billion senior secured term loan due 2028 and $400 million senior secured revolving credit facility.

"Centuri's Ba2 ratings reflects its strong market position as a services company to the utility industry with a majority of multi-year master service agreements (MSAs) that contribute to a stable, recurring revenue stream, long-term relationships with high-quality customers and extensive track record as a utility services company. However, the ratings also incorporate its elevated leverage, relatively small scale and the risks associated with the integration of the Riggs Distler acquisition," said Domenick R. Fumai, a Moody's vice president and lead analyst for Centuri Group, Inc., in a press release.

Centuri Group, Inc. and co-borrower, Centuri Canada Division Inc., will apply the term loan proceeds an an about $100 million draw on the new revolving credit facility at close, towards the $855 million acquisition of Riggs Distler & Co., Inc. refinance roughly $330 million of U.S. and Canadian dollar-denominated bank debt, fund working capital, add a small amount of cash to the balance sheet and pay related fees and expenses.

The outlook is stable.

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