S&P cuts CNX Midstream

S&P said it downgraded CNX Midstream Partners LP’s rating to B+ from BB-, citing the downgrade of the company’s parent CNX Resources Corp. to B+ from BB-.

“Our BB- issue-level rating on the company’s debt is unchanged. However, we are revising our recovery rating to 2 from 3 to indicate our expectation for substantial (70%-90%; rounded estimate: 85%) recovery in a payment default scenario,” said S&P in a press release.

CNX Midstream earns about 70%-80% of its revenue from CNX, which is both the company’s sponsor and owner of its general partner. S&P caps the issuer credit rating on CNX Midstream at the rating on CNX. The companies share the same management team. The downgrade of CNX reflects a deteriorating commodity price outlook and S&P’s view that the company has limited access to the unsecured debt market to address its maturities beginning in early 2022.

The outlook is negative.

S&P cuts Juice Plus

S&P said it downgraded the issuer credit rating of NSA International LLC (Juice Plus) to CCC from B-. The agency also lowered its issue-level rating on the company's senior secured credit facility to CCC from B. S&P revised the recovery rating to 3 from 2, indicating expectations for meaningful (50% - 70%, rounded estimate 65%) recovery in the event of default.

“The downgrade reflects our expectation that operating performance will continue to deteriorate in 2020, resulting in declining EBITDA interest coverage and a potential for financial covenant violation absent relief from its lenders. Juice Plus' net sales and EBITDA were both down by double-digit percentages over the 12 months ended Oct. 31, 2019, primarily driven by continued challenges and softness across U.S. and Europe, leading to declining distributor and customer base,” said S&P in a press release.

The outlook is negative.

Moody's trims Prairie loan

Moody's Investors Service said it downgraded Prairie ECI Acquiror LP's senior secured term loan rating to B2 from B1 and Tallgrass Energy Partners, LP's senior unsecured notes to B1 from Ba3. Moody's also upgraded Prairie's corporate family rating to Ba3 from B1 and probability of default rating to Ba3-PD from B1-PD. Concurrently, Moody's withdrew Tallgrass’ Ba2 CFR, Ba2-PD PDR and SGL-3 speculative grade liquidity rating.

This concludes the review that was started in December following the announcement of Blackstone Infrastructure Partners and certain other investors they had entered an agreement to acquire the outstanding publicly held class A shares in Tallgrass Energy, LP for about $3.55 billion.

The investors will contribute up to $2.92 billion of cash equity and borrow $575 million to fund the acquisition. On Wednesday, Blackstone announced the upsize of its $1.1 billion term loan by $375 million to partially fund the take-private transaction. Blackstone's announcement also indicates the remainder of the $575 million required to finance the take-private transaction will be funded by incremental borrowings at Tallgrass Energy Partners.

S&P cuts Vine Oil notes to CCC-

S&P said it downgraded issue-level ratings on Vine Oil & Gas LP’s senior unsecured notes to CCC- from CCC. At the same time, S&P revised the recovery rating on the notes to 6 from 5. The 6 recovery rating indicates expectations of negligible (0%-10%; rounded estimate: 0%) recovery for creditors in the event of a payment default. This is down from the prior recovery expectations of 15%.

The recovery and issue-level ratings revision reflects the new $280 million second-lien secured revolving credit facility (not rated) launched on Dec. 30. The new second-lien takes precedent over the senior unsecured notes in the event of default.

The company’s CCC+ issuer credit rating and negative outlook are unchanged.

S&P ups PPD

S&P said it upgraded Pharmaceutical Product Development LLC’s rating to B+ and removed its ratings from CreditWatch, where the agency placed them with positive implications on Tuesday.

The upgrade follows PPD's IPO and assumes it will fully repay the $1.45 billion holdco notes and its financial policy will be less aggressive. We estimate that on a pro forma basis, the S&P Global Ratings'-adjusted leverage is around 5.7x as of Sept. 30, 2019, which we expect will decline to 5.1x at the end of 2020 and 4.8x at the end of 2021. This compares with our expectation that leverage would remain above 6x before the IPO,” said S&P in a press release.

The outlook is positive.

S&P puts Melco Resorts units on watch

S&P said it placed all its ratings for Melco Resorts (Macau) Ltd. and Studio City Co. Ltd. and their debt on CreditWatch with negative implications. Both are subsidiaries of Melco Resorts & Entertainment Ltd.

“The CreditWatch placement reflects our view that Melco Resorts & Entertainment Ltd. (MLCO) group's key credit measures could exceed our threshold for the current rating if the impact of the coronavirus outbreak continues into the second and third quarter of 2020,” said S&P in a press release.

With the majority of its EBITDA generated in Macau, Melco Resorts & Entertainment’s debt-to-EBITDA ratio is likely to exceed 3.5x in 2020 if the impact of the epidemic lasts into the second or third quarter of this year, the agency said.

S&P puts Unisys on watch

S&P said it placed all its Unisys Corp. ratings on CreditWatch with positive implications. Unisys plans to sell its U.S. government business to Science Applications International Corp. in a deal valued at $1.2 billion.

Unisys could use the proceeds to repay debt and contribute to its defined benefit plans, which are currently significantly underfunded (more than $1.8 billion of underfunded pension obligations with significant required payments in 2020, 2021 and 2022), S&P said.

“We expect to resolve the CreditWatch when the transaction is complete and we have a greater understanding of how Unisys will use the proceeds. We will also assess the company's future business prospects, profitability and financial policies,” said S&P in a press release.

S&P rates Informatica loans B-, CCC+, view to stable

S&P said it assigned Informatica’s proposed first-lien facility a B- with a recovery rating of 3 and a CCC+ issue-level rating and 5 recovery rating to the proposed second-lien term loan.

The transaction reduces refinancing risk and may lead to an overall reduction in interest costs; however, it will also increase pro forma leverage by about 0.25x, which in S&P’s view, diminishes prospects for a leverage reduction below 8x over the next 12 months.

“We are not taking action the company’s existing debt ratings, as we expect repayment at the close of this transaction,” the agency said in a press release.

S&P affirmed Informatica’s B- rating and revised the outlook to stable from positive. “The stable outlook on Informatica reflects our expectation that the company will maintain leverage in the low- to mid-8x area over the next year on good demand for its software offerings, which we think will translate to continued growth in net new bookings, low- to mid-single-digit percent organic revenue growth, and relatively stable EBITDA margins,” said S&P.

Moody’s assigns Aenova facilities B3

Moody’s Investors Service said it assigned a B3 instrument rating to the new €440 million term loan B and the new €50 million revolver issued to Aenova Holding GmbH.

Proceeds from the €440 million first-lien cash-pay facility and the €100 million second-lien pay-in-kind facility, along with a €100 million of equity injection from BC Partners and €28 million of cash on balance sheet, will be used to repay the €651 million of bank debt and fees associated with the transaction. As part of the senior facility agreement, the company will also enter into a new revolver agreement. Moody’s will withdraw the instrument ratings on the €639 million existing first- and second-lien facilities upon their repayment and the €50 million revolver upon its cancellation.

Moody’s also upgraded the corporate family rating to B3 from Caa1 and the probability of default rating to B3-PD from Caa1-PD for Apollo 5 GmbH or Aenova. The ratings are conditional on Aenova successfully placing the new debt.

“Today’s rating action on Aenova reflects the proposed refinancing of its capital structure, tackling the main short-term risk, which is now more likely given the progress the company has made in its turnaround plan. The equity injection is also credit positive because it will reduce debt and implies that shareholders are supportive of Aenova’s transformation,” said Florent Egonneau, a Moody’s associate vice president and lead analyst for Aenova, in a press release.

S&P assigns Altium loan B+

S&P said it assigned a B+ rating to Altium Packaging LLC’s proposed first-lien term loan due 2026. The recovery rating assigned to the loan is 3 indicating meaningful (30%-50%, rounded estimate: 50%) recovery in the event of a payment default. Upon the close of the refinancing transaction, S&P said it expects to withdraw the existing issue-level ratings on the company.

Altium is refinancing its capital structure, issuing an $830 million senior secured term loan due 2026, in order to improve overall cost of capital. “We view this as a leverage-neutral transaction. The B+ issuer credit rating on Altium, formerly known as Consolidated Container Co. LLC, is unchanged because the rebranding and refinancing plan does not materially affect the entity's existing cash flows, collateral pledges, or subsidiary guarantees,” S&P said in a press release.

The proposed $830 million senior secured term loan issue-level and recovery ratings are the same as the outstanding debt.

Moody’s rates AssuredPartners facilities B2

Moody’s Investors Service said it assigned B2 ratings to a new five-year senior secured revolving credit facility and a new seven-year senior secured term loan being issued by AssuredPartners Inc. The new facilities will refinance the company’s $267.5 million revolver and $1.9 billion senior secured term loan with higher face amounts and longer maturities.

The company will use the incremental proceeds to fund acquisitions and pay related fees and expenses. Moody’s said it expects to withdraw the ratings on the existing revolver and term loan once the refinancing closes.

“AssuredPartners’ ratings reflect its growing presence in middle-market insurance brokerage, its good mix of business across property & casualty insurance and employee benefits and its healthy EBITDA margins, according to Moody’s. The company has made organizational changes to improve its organic growth, which Moody’s expects will be in the low-single digits in 2020,” said Moody’s in a press release.

The outlook for AssuredPartners remains unchanged at stable.

S&P assigns BME Group loans B, CCC+

S&P said it assigned B ratings to BME Group Holding BV and its €980.2 million first-lien term loan (split between the €280.2 million term loan A and €700 million term loan B) and the €195.2 million revolving credit facility. The agency also assigned a CCC+ issue rating to the €217.6 million second-lien term loan.

BME was formerly known as Clay Holdco BV before it was acquired in a leveraged buyout.

“The ratings reflect BME's high leverage at closing of the leveraged buyout transaction, with about 6.5x adjusted debt to EBITDA. The ratings are also based on our view that the company could display an increased tolerance for higher leverage and a less conservative financial policy under its private-equity ownership,” S&P said in a press release.

The outlook is stable.

S&P rates Builders FirstSource notes BB-

S&P said it assigned a BB- with a recovery rating of 4 to Builders FirstSource Inc.’s proposed $500 million of senior unsecured notes due 2030.

The agency also upgraded the ratings on the company’s $467.6 (original amount) term loan due 2024 and on its $475 million of senior secured notes due 2027 to BB+ from BB-, with a revised recovery rating of 1 from the previous recovery rating of 3.

“We raised the issue-level ratings on Builders FirstSource senior secured obligations based on the proposed redemption of a significant portion of company’s secured debt ($500 million) and replacing it with unsecured debt of approximately the same amount. As a result, recovery prospects on the $467.6 (original amount) term loan due 2024 and on its $475 million of senior secured notes due 2027 have improved to a recovery rating of 1, indicating that creditors could expect recovery of 100% (rounded estimate: 95%) in the event of a default,” said S&P in a press release.

S&P affirmed the company’s BB- rating, and the outlook remains stable.

Moody’s gives Builders FirstSource notes B3

Moody’s Investor Services said it assigned a B3 rating to Builders FirstSource, Inc.’s proposed $500 million of senior unsecured notes due 2030. Proceeds and borrowings under the company’s revolving credit facility will be used to refinance the company’s senior secured notes due 2024. The B2 rating on these notes will be withdrawn upon the close of the transaction. The SGL-2 speculative grade liquidity rating is maintained.

The B3 rating on the company’s senior unsecured notes due 2030, two notches below the corporate family rating, results from its subordination to the company’s ABL revolver and secured term loan and notes. Builders’ material subsidiaries guarantee the company’s secured and unsecured debt.

“We view the proposed transaction as credit positive, since BLDR is extending its maturity profile and eliminating, in an essentially leverage-neutral transaction, refinancing risk in 2024, when only its $52 million senior secured term loan matures. We expect BLDR will be able to easily extend its revolving credit facility beyond its current expiration in late 2023 while maintaining ample availability to pay off its term loan. The anticipated change in interest payments is negligible relative to BLDR’s total cash interest payments of about $100 million for 2019,” said Moody’s in a press release.

Moody’s also revised the outlook to positive from stable reflecting Moody’s expectations the company will continue to perform well resulting in better credit metrics, such as leverage trending towards 2.5x. An extended maturity profile and industry fundamentals that will support growth over the next 18 months further support the positive outlook.

Moody’s affirmed the company’s B1 rating, the B1-PD probability of default rating and the B2 rating on its senior secured debt.

Moody’s: Match facilities Ba1, notes Ba3

Moody’s Investors Service said it assigned Ba1 ratings to Match Group Inc.’s upsized $750 million revolving credit facility and $425 million term loan B and a Ba3 rating to its proposed $500 million of senior unsecured notes. The agency also assigned the company a first-time Ba2 corporate family rating and Ba2-PD probability of default rating. Concurrently, Moody’s assigned an SGL-1 speculative grade liquidity rating. Match’s existing senior unsecured notes remain unchanged at Ba3. The outlook is stable.

Match’s parent, IAC/InterActiveCorp, announced on Dec. 19, its board of directors had approved the separation of IAC and Match into two independent public companies. Under the terms of the spin-off transaction, IAC’s shareholders will receive a direct ownership interest in Match proportionate to IAC’s 81% equity stake in Match. In connection with the transaction, Match will retain IAC’s $1.7 billion of unrated exchangeable notes and associated hedging instruments and pay $3 per share cash to Match’s shareholders (including IAC), totaling about $840 million.

Proceeds from the new notes offering together with cash balances will be used to pay the one-time distribution. Match also launched an amendment to its bank credit agreement to extend the tenor of its credit facilities and upsize the revolver to $750 million from $500 million. The spinoff is expected to close by the end of June 2020.

Moody’s pulls ratings on UPC term loans

Moody’s Investors Service said it withdrew the Ba3 ratings on the $700 million senior secured term loan series AT due 2028 issued by UPC Financing Partnership and the €400 million senior secured term loan series AU due 2029 issued by UPC Broadband Holding BV. The negative outlook assigned to UPC Broadband Holding BV has also been withdrawn.

“The ratings were assigned in error and have been withdrawn in order to comply with the shareholding provisions of the European regulation on credit rating agencies,” Moody’s said in a press release.

Moody's gives Parsley Energy notes Ba3

Moody's Investors Service said it assigned a Ba3 rating to Parsley Energy LLC's proposed $400 million of senior unsecured notes due 2028. Proceeds will be used to redeem its $400 million of senior unsecured notes due 2024. None of Parsley's other ratings are affected by the note issuance. The outlook is stable.

Parsley's senior unsecured notes, including the proposed issue, are rated Ba3, one notch below the corporate family rating. The rating on the notes reflects their subordinated position to Parsley's $1 billion secured revolving credit facility.

S&P raises Liberty Property Trust

S&P said it upgraded the issuer credit rating on Liberty Property Trust and its senior unsecured debt to A- from BBB and removed all of its ratings on the company from CreditWatch, where it placed them with positive implications on Oct. 28. The outlook is stable.

“Subsequently, we are withdrawing our issuer credit rating on Liberty Property Trust because Prologis Inc. has assumed its senior unsecured notes. The upgrade reflects our belief that the company's acquisition by a higher-rated entity will enhance its credit profile,” said S&P in a press release.

Fitch assigns Goldman Sachs BDC notes BBB-

Fitch Ratings said it assigned an expected rating of BBB- to Goldman Sachs BDC Inc.'s announced unsecured note offering. Fitch does not expect there to be a material effect on the company's leverage levels as a result of the issuance, as proceeds will be used to repay secured debt.

Fitch said it views the firm's ability to access the institutional bond market favorably, as it provides the company with enhanced funding flexibility.

The expected rating on the unsecured notes is equalized with the ratings assigned to the business development company's senior unsecured debt, as the new notes will rank equally in the capital structure. The alignment of the unsecured debt rating with that of the long-term issuer default rating reflects solid collateral coverage for all classes of debt given the company is subject to a 150% asset coverage limitation, said Fitch.

Moody’s rates Goldman Sachs BDC notes Baa3

Moody’s Investors Service said it assigned a Baa3 rating to Goldman Sachs BDC, Inc.’s new senior unsecured notes due February 2025. The company’s rating outlook remains stable.

Moody’s Baa3 rating of the new senior unsecured notes reflects the company’s Baa3 issuer credit profile, the priority and proportion of senior unsecured debt in its debt capital structure and the strength of the senior notes’ asset coverage. The notes will rank pari passu with the company’s other senior unsecured debt.

Proceeds will be used primarily to repay indebtedness under the company’s revolving credit facility.

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