Southwest Gas raises $250 million from bond sale
Southwest Gas Corp. has successfully raised $250 million in its latest issuance of senior notes, mostly to pay down corporate debt.
The Las Vegas-based utility said the newly issued bonds would pay 4.875 percent and mature on Oct. 1, 2043.
The publicly traded natural gas utility said it plans to use $180 million of the proceeds to “temporarily pay down, in full,” the amount owed under its revolving credit line. The remaining proceeds “may be used for general corporate purposes.”
Fitch Ratings assigned an A rating to the notes and its ratings outlook is stable. In a report, Fitch noted the stable outlook reflects the low-risk business profile of Southwest Gas as a regulated natural gas distribution utility.
“Southwest Gas’ tariff mechanisms feature full and timely recovery of commodity costs as well as revenue decoupling which provide for stable earnings and cash flow,” wrote Daniel Neama, primary analyst with Fitch in New York, in a four-page report.
Neama said earnings and cash flow of “its nonregulated pipeline construction subsidiary, NPL Construction Co., are more volatile, but have been robust in recent years.
Meanwhile, Southwest Gas will keep its fourth-quarter dividend of 33 cents per share, the same rate it’s paid for the past two quarters after raising the payout from 0.295 cents per share. The regular dividend equals about $128 per share annually.
