S&P cuts Dominion Energy Questar

S&P said it downgraded Dominion Energy Questar Pipeline LLC to BBB- from BBB and removed the company’s ratings from CreditWatch with negative implications, where they were placed on Oct. 6.

The downgrade follows Dominion Energy Inc.’s sale of the pipeline company to lower-rated Southwest Gas Holdings Inc. (SWX) for about $1.6 billion, including assumed debt of about $430 million.

“The lower rating on DEQP reflects strength of its stand-alone credit profile (SACP) and the relationship to its new parent, SWX. Our assessment of DEQP's group status is strategically important, indicative of some level of group support,” S&P said in a press release.

The outlook is negative reflecting the outlook on SWX. “The negative outlook is based on new parent SWX and incorporates the company's decision to fund the initial transaction with short-term debt and the execution risk associated with its future equity issuance,” the agency said.

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