Moody's Assigns Ba3 Rating to Centuri Holdings, Inc.'s Senior Secured Credit Facilities

Strategic Insights -

Centuri Holdings, Inc. has received a Ba3 rating for its proposed $1.22 billion senior secured credit facilities, which include a $450 million revolver and a $770 million term loan B. Moody's also assigned a Ba3 corporate family rating (CFR), Ba3-PD probability of default rating, a Speculative Grade Liquidity rating of SGL-3, and a stable ratings outlook to Centuri Holdings, Inc. The refinancing is viewed positively as it enhances liquidity, extends maturities, and provides some covenant flexibility. Centuri's strong position as a utility infrastructure services company, multi-year master service agreements, and highly-rated utility customer base support its Ba3 CFR.

Key Takeaways:

  • Moody's assigned a Ba3 rating to Centuri Holdings, Inc.'s proposed $1.22 billion senior secured credit facilities.
  • The refinancing is viewed positively as it enhances liquidity, extends maturities, and provides some covenant flexibility.
  • Centuri's Ba3 CFR is supported by its strong position as a utility infrastructure services company, multi-year master service agreements, and highly-rated utility customer base.
  • The company's end markets are expected to experience healthy demand due to aging infrastructure and the importance of the utility industry in the US.
  • Centuri has adequate liquidity supported by $15 million of balance sheet cash and $213 million of availability under its $450 million revolver.
  • The Ba3 ratings for the senior secured term loan and revolving credit facility are in line with the Ba3 CFR given the preponderance of secured debt in the capital structure.

Statistics:

  • $1.22 billion: The proposed senior secured credit facilities.
  • $450 million: The revolver's maturity in 2030.
  • $770 million: The term loan B's maturity in 2032.
  • $15 million: Centuri's balance sheet cash.
  • $213 million: The availability under the $450 million revolver.
  • 4.0x: The expected Moody's adjusted leverage by end of 2025.
  • 53%: The ownership interest of parent Southwest Gas.
  • $2.7 billion: Centuri's revenue for the last twelve months ended March 31, 2025.

Sources:

  • Moody's Ratings, assigned a Ba3 rating to Centuri Holdings, Inc.'s proposed $1.22 billion senior secured credit facilities.
  • Construction published in April 2025 and available at https://ratings.moodys.com/rmc-documents/440611.
  • Rating Methodologies page on https://ratings.moodys.com for a copy of the Construction methodology.