S&P gives Vyve, facilities B+

S&P said it assigned Mega Broadband Investments Intermediate I LLC (Vyve Broadband) and its planned $725 million of senior secured credit facilities B+ ratings. The facilities will consist of a $75 million revolver due 2025 and a $650 million term loan due 2027. The recovery rating on the facilities is 3, indicating an expectation of 50%-70% recovery (rounded estimate: 55%) in the event of a default.

Vyve will use the facilities and $8 million in balance sheet cash to refinance $535 million in indebtedness, fund a $102 million dividend and pay $21 million of fees, resulting in pro forma debt to EBITDA of about 6x.

The outlook is stable. “The stable outlook reflects S&P Global Ratings’ expectation that strong growth from broadband will enable deleveraging potential of more than 0.5x per year, but rating upside is limited over the next year by relatively low penetration rates, required network investments that will limit free operating cash flow, and an aggressive financial policy,” S&P said in a press release.

Moody’s gives Parts Authority B2, loan B1

Moody’s Investors Service said it assigned first-time ratings to PAI Holdco, Inc. (Parts Authority), including a B2 corporate family rating, a B2-PD probability of default rating and a B1 rating to the proposed first-lien senior secured term loan. The outlook is stable.

The ratings reflect elevated leverage (pro forma debt-to-EBITDA approaching 6x including Moody’s standard adjustments) and Moody’s forecast for modest free cash flow driven by the need to maintain large and growing inventory levels. The liquidity position is modest with expectations to hold nominal cash on the balance sheet along with an ABL facility that is small relative to the revenue base, the agency said.

“Governance considerations acknowledge private equity ownership and the risk that Parts Authority could undertake a debt-funded distribution or large acquisition to further enhance scale in a highly competitive and fragmented industry. Accordingly, financial policy was a key consideration in the rating outcome,” Moody’s said in a press release.

The rating assignments follow the company’s plan to raise senior secured debt, consisting of an unrated $125 million asset-based loan (ABL) facility, a $600 million first-lien term loan and an unrated $200 million second-lien term loan to help fund Kohlberg & Co.’s acquisition of a majority stake in Parts Authority, the agency said.

Private equity sponsors and management will provide cash equity.

Moody’s cuts Barracuda, rates loan Caa2

Moody’s Investors Service said it downgraded Barracuda Networks Inc.’s ratings, including the corporate family rating to B3 from B2 and the probability of default rating to B3-PD from B2-PD.

Moody’s cited the company’s recently announced debt-funded dividend as the reason for the downgrade.

Barracuda plans to fund the about $650 million distribution with an upsized first-lien term loan and new second-lien debt. Moody’s assigned a Caa2 rating to the proposed second-lien debt and affirmed its first-lien debt at B2.

The outlook is stable.

S&P cuts Centurion Pipeline loans

S&P said it downgraded the issue-level rating on Centurion Pipeline Co. LLC’s senior secured term loans to BB from BB+ and changed the recovery rating on the loans to 2 from 1. The 2 recovery rating indicates an expectation for substantial (70%-90%; rounded estimate: 85%) recovery in a default.

In explaining the downgrade, S&P said Centurion increased its incremental revolving credit commitments (unrated) to $147.5 million from $100 million. Also, S&P said it no longer views venture capital firm, EnCap Flatrock Midstream as a financial sponsor of Centurion.

The outlook is stable.

S&P trims Transocean Ltd.

S&P said it lowered its issuer credit rating on Transocean Ltd. to CC from CCC-. Simultaneously, the agency downgraded the issue-level ratings on the five series of notes in the below-par cash tenders to CC.

The notes are the 6½% senior unsecured notes due 2020 to CC from CCC-, the 6 3/8% senior unsecured notes due 2021 to CC from CCC-, the 3.8% senior unsecured notes due 2022 to CC from CCC-, the 5 3/8% senior secured notes due 2023 to CC from CCC+ and 7¼% senior unsecured notes (with subsidiary guarantees) due 2025 to CC from CCC.

S&P said it would view the repurchases as distressed.

The outlook is negative.

Moody’s lowers WildBrain

Moody’s Investors Service said it downgraded WildBrain Ltd.’s corporate family rating to B3 from B2 and probability of default rating to B3-PD from B2-PD. At the same time, Moody’s affirmed the B2 senior secured credit facilities ratings. The outlook remains stable, and the speculative grade liquidity rating remains SGL-2.

“The downgrade reflects reduced earnings and high leverage of around 8x, which we expect to be sustained for the next 12-18 months,” said Jonathan Reid, a Moody’s analyst, in a press release.

S&P cuts WP CPP

S&P said it lowered all of its ratings on WP CPP Holdings LLC by one notch, including the issuer credit rating, which went to CCC+ from B-.

“Commercial aircraft and engine original equipment manufacturers (OEMs) have reduced build rates for the remainder of 2020 as a result of the coronavirus pandemic’s impact on air traffic. We expect these rates to remain at lower levels through 2021, which will result in lower demand for WP CPP Holdings LLC’s products and its credit metrics remaining weak,” S&P said in a press release.

The outlook is negative.

Moody’s upgrades Consilio

Moody’s Investors Service said it upgraded GI Revelation Acquisition LLC’s (Consilio) corporate family rating to B3 from Caa1 and probability of default rating to B3-PD from Caa1-PD.

Concurrently, Moody’s upgraded the company’s first-lien senior secured credit facility (revolver and term loan) to B2 from B3 and its second-lien senior secured term loan to Caa2 from Caa3. The agency changed the outlook to stable from negative.

“The upgrade to B3 CFR reflects higher than Moody’s forecasted revenue and earnings over 2020, due to a faster industry rebound and Consilio’s ability to effectively manage costs and working capital amid the Covid-19 pandemic. Moody’s also expects that revenue and earnings will normalize over the next several quarters, such that debt-to-EBITDA leverage (Moody’s adjusted) over the next 12-18 months will improve close to 5x, with a good liquidity position,” the agency said in a press release.

The outlook reflects the view a portion of the company’s cost actions taken amid the pandemic will be permanent and will lead to an improved credit profile going forward, Moody’s said.

S&P ups JBS, JBS USA

S&P said it raised its long-term issuer credit and senior unsecured debt ratings on JBS SA and JBS USA Lux SA to BB+ from BB. The agency also affirmed its national scale rating on JBS at brAAA.

S&P also raised the senior secured debt ratings on JBS USA to BBB from BBB-. The recovery expectations remain unchanged.

JBS continues to deleverage. Its strong performance boosts EBITDA and free cash flows despite industry volatility, S&P said.

The outlook is stable.

Moody’s ups KLDiscovery

Moody’s Investors Service said it upgraded LD Intermediate Holdings, Inc.’s (KLDiscovery) corporate family rating to Caa1 from Caa2 and probability of default rating to Caa1-PD from Caa2-PD. The outlook was changed to stable from negative.

“The upgrade to Caa1 CFR and stable outlook reflect Moody’s view that KLD’s liquidity profile through 2020 is ahead of prior projections amid the Covid-19 pandemic, such that earnings and liquidity will remain relatively stable over the next 12-18 months and that the company will be able to sustain cost savings from recent actions taken amid the pandemic,” the agency said in a press release.

Concurrently, Moody’s upgraded the company’s first-lien senior secured credit facility to B2 from B3 and the speculative grade liquidity rating to SGL-3 from SGL-4.

“The B2 rating on the first-lien credit facility (revolver and term loan), two notches above the company’s Caa1 CFR, reflects the support and loss absorption provided by the unrated convertible debt under Moody’s loss given default (LGD) methodology,” the agency said.

S&P raises Pilgrim’s Pride

S&P said it upgraded Pilgrim’s Pride Corp. and its senior unsecured debt to BB+ from BB, The 3 recovery rating (50%-70%; rounded estimate: 65%) on the senior unsecured debt is unchanged. The outlook is stable.

“The upgrade and stable outlook follow a similar action on Pilgrim’s Pride parent JBS, a Brazil-based protein processor. The upgrade reflects JBS’ strong cash flows and our expectation that JBS will continue to reduce leverage below 2.5x in the next year,” S&P said in a press release.

The BBB- issue-level rating and 1 recovery rating (90%-100%; rounded estimate: 95%) on the company’s senior secured debt are unchanged.

S&P ups Premier Brands

S&P said it raised the ratings for Premier Brands Group Holdings LLC and its first-lien term loan to CCC from SD and D, respectively. The recovery rating is 4, indicating an expectation for average (rounded estimate: 30%) recovery.

Premier Brands obtained a covenant waiver that delayed the excess cash flow payment to the term loan’s maturity. Even with the waiver, S&P said it believes the company remains dependent upon favorable business and economic conditions to meet its financial obligations.

“The upgrade reflects Premier’s improved liquidity given it has obtained a waiver until the first-lien term loan matures in 2024 for the excess cash flow payment of $11 million that was due in April 2020,” the agency said.

The outlook is negative.

S&P puts Datto on positive watch

S&P said it placed all its ratings for Datto Inc., including its B issuer rating, on CreditWatch with positive implications.

The placement follows Datto reporting it started its IPO expected to bring in net proceeds of at least $475 million. Datto is expected to use these proceeds to repay borrowings under its $550 million term loan and/or $50 million revolving credit facility, S&P said.

“Based on these intentions, we expect Datto will lower its gross debt balance by about $475 billion and S&P Global Ratings-adjusted leverage below 1x,” the agency said in a press release.

S&P said it expects to resolve the CreditWatch following completion of the IPO and the debt repayment.

S&P pulls HD Supply from watch

S&P said it removed HD Supply Inc.’s ratings from CreditWatch with negative implications, where they were placed on Sept. 26, 2019.

The agency affirmed HD Supply’s BB+ issuer rating, its BBB- issue-level rating, with a 1 recovery rating, on the company’s asset-based lending facility and the first-lien term loan and the BB- issue-level rating, with a 6 recovery rating, on the company’s unsecured notes.

“The affirmation reflects HD Supply’s smaller scale and more concentrated end-market exposure, partially offset by a less cyclical revenue base after the White Cap sale. With about $3 billion in pro forma revenue as of Aug. 2, 2020, HD Supply is one of the leading players in the fragmented maintenance, repair, and operations (MRO) market, with about 4%-5% market share,” S&P said in a press release.

The outlook is stable.

Moody’s changes Global Ship view to positive

Moody’s Investors Service said it changed the outlook for Global Ship Lease, Inc. to positive from stable. Concurrently, Moody’s affirmed the company’s B3 corporate family rating, B3-PD probability of default rating and B3 instrument rating for the first-priority senior secured notes due 2022.

“The outlook change reflects the resilient performance of both the company and its end markets through 2020 and Moody’s expectation that Moody’s-adjusted debt/EBITDA will start trending below the threshold required for a higher rating. While the company’s performance should be supportive of refinancing efforts, these positive developments are partly balanced by the sizeable debt maturities in 2022, notably the first-priority secured notes in November of that year,” the agency said in a press release.

S&P revises Thor view to positive

S&P said it revised the outlook for Thor Industries Inc. to positive from negative and affirmed all its ratings, including the BB- issuer rating.

“The outlook revision to positive and the rating affirmations reflect rapidly rising demand for RVs, which will likely enable Thor to maintain adjusted debt to EBITDA well below 3.25x through fiscal 2021,” S&P said in a press release.

Public perception that RVs are a safe travel option during the pandemic has delivered relatively robust revenue and EBITDA generation at Thor in its fiscal fourth-quarter 2020 (ended July 31, 2020), and S&P said this could continue through fiscal 2021.

S&P alters Crackle view to stable

S&P said it changed the outlook for Crackle Intermediate Corp. (SnapAV) to stable from negative and affirmed the B- ratings on the company and its senior secured term loan and revolver. The recovery rating is unchanged at 3.

SnapAV’s organic revenue should increase this year on its smart-home solutions through the pandemic due to the shifts to remote work and school, S&P said.

“SnapAV’s second-quarter revenue increased almost 10% from the first quarter due to the strong demand for its smart-home products. We project second-half revenue will be even stronger, with both quarters increasing at least 15% compared to the first quarter,” S&P said in a press release.

By the end of 2020, the agency said it expects to see leverage in the low 8x area.

S&P alters Southwestern Energy view to stable

S&P said it changed the outlook for Southwestern Energy Co. to stable from negative and affirmed the BB- ratings on the company and its unsecured debt.

Citing improved prices, S&P said it now forecasts Southwestern’s financial measures to improve meaningfully, including FFO to debt of around 30% to 35% and debt to EBITDA around 2.5x-3x for the next two years.

S&P rates Advantage Sales loan B

S&P said it gave Advantage Sales & Marketing Inc.’s planned $1.6 billion first-lien term loan preliminary B and 3 recovery ratings. The 3 rating indicates an expectation for meaningful recovery for secured creditors in a default.

The company plans to use the loan proceeds and $500 million of other pari passu senior secured debt to provide a portion of funds to refinance its debt connected with its parent’s planned merger with special-purpose acquisition company Conyers Park II Acquisition Corp.

Conyers and ASM’s financial sponsors will contribute more than $1 billion of equity, which will be used to repay debt. S&P said it sees assigning ASM and its parent Advantage Solutions Inc. a B issuer rating.

S&P affirmed all of Advantage’s ratings, including the CCC+ issuer credit ratings, on ASM and its parent, Advantage Solutions Inc., and maintained the CreditWatch, where they were placed with positive implications on Sept. 10.

S&P rates Anchor Glass loan CCC+

S&P said it gave Anchor Glass Container Corp.’s new first-lien term loan a CCC+ rating and a 4 recovery rating. The 4 recovery rating indicates an expectation for average recovery (30%-50%; rounded estimate: 35%) in the event of a payment default. The CCC+ issue-level rating and 4 recovery rating on its existing first-lien term loan remain unchanged.

The loan was issued as part of a distressed debt exchange. Anchor exchanged a new tranche of its first-lien term loan for a part of its outstanding second-lien term loan. “The distressed exchange has reduced the near-term risk of a conventional default. However, we continue to view the company’s capital structure as unsustainable,” S&P said.

The agency said it also upgraded Anchor Glass to CCC+ from SD to reflect the risk of a conventional default. S&P raised the issue-level rating on its second-lien term loan to CCC- from D. The loan’s 6 recovery rating remains unchanged, indicating an expectation for negligible (0%-10%; rounded estimate: 0%) recovery of principal in the event of a payment default.

The outlook is negative.

S&P drops Codere, rates notes CCC+

S&P said it downgraded Codere SA to SD from CC and its €500 million and $300 million of senior secured notes to D from CC. The agency also assigned a preliminary CCC+ rating to Codere’s planned €165 million of super senior notes.

The downgrade follows the approval of Codere’s scheme of arrangement launched on Aug. 3. After having received all the necessary scheme approvals, Codere will implement the proposed debt restructuring,

S&P said it views the scheme as a distressed exchange and equivalent to a default.

Moody’s assigns Mega Broadband B2

Moody’s Investors Service said it assigned a B2 corporate family rating and B2-PD probability of default rating to Mega Broadband Investments Intermediate I, LLC ahead of its planned refinancing and shareholder distribution.

Moody’s also assigned a B2 to Eagle Broadband Investments, LLC’s proposed issuance of a $725 million senior secured bank credit facility, including a $75 million revolving credit facility due 2025 and a seven-year, $650 million term loan. Eagle is the borrower on the first-lien bank credit facility. The outlook is stable.

“Moody’s rates Eagle’s senior secured bank debt facility and senior secured instruments B2 (LGD4), in line with the B2 CFR, reflecting the company’s B2-PD probability of default rating and an average expected family recovery rate of 50% at default as these obligations account for the vast majority of the capital structure,” the agency said in a press release.

Cash and term loan proceeds of $650 million, the financing will be used to repay $535 million of debt, close to $100 million in dividends plus transaction fees and expenses.

Moody’s eyes McAfee for upgrade

Moody’s Investors Service said it placed McAfee, LLC’s ratings, including the B2 corporate family rating on review for upgrade following its announcement to file for an initial public offering.

The company’s B2 senior secured first-lien and Caa1 senior secured second-lien instrument ratings are also being placed on review for upgrade and the company’s B2-PD probability of default rating. The agency changed the outlook to ratings under review from stable.

The potential proceeds are expected to be around $600 million before fees and expenses. Moody’s said it expects McAfee to use most of the net proceeds to repay debt.

“The review will focus on capital structure and financial policies post-closing of the IPO. McAfee has indicated that it will use proceeds of the equity offering to repay second-lien debt. With proceeds from the IPO and subsequent paydown of debt, McAfee’s Debt/EBITDA leverage could decline to 5x or under based on results for the twelve months ended June 30, 2020,” Moody’s said in a press release.

Moody’s gives NorthStar, loan B2

Moody’s Investors Service said it assigned first-time ratings to NorthStar Group Services, Inc., including a B2 corporate family rating, a B2-PD probability of default rating and a B2 rating on its proposed senior secured term loan. Waste Control Specialists, LLC will be a co-borrower on the new loan.

The assignments follow NorthStar’s plan to issue a $555 million term loan due 2027. The proceeds will be used to refinance debt and help pay a dividend to NorthStar’s private equity owner, J.F. Lehman & Co.

“Moody’s views the sizeable $322 million dividend to Jflco, the third distribution within the last 12 months, as aggressive and reflective of elevated governance risk, making it likely that financial leverage will be elevated going forward, which is incorporated in the ratings,” the agency said in a press release.

The outlook is stable. The outlook reflects the expectation of solid organic revenue growth and greater free cash flow from the contracted book of business, and the company’s good position to capitalize on potential upcoming nuclear power plant deconstruction and decommissioning projects and future large projects in its commercial/industrial deconstruction business, Moody’s said.

Moody’s gives Voodoo, loans Ba3

Moody’s Investors Service said it assigned a first-time Ba3 corporate family rating and a Ba3-PD probability of default rating to Stan Holding SAS, 100% owner of Voodoo SAS. Concurrently, Moody’s gave a Ba3 rating to the proposed €220 million term loan B and €50 million revolving credit facility both due 2025 and borrowed by Stan Holding.

In August, Tencent Holdings Ltd. reported acquiring a 26% equity stake in Voodoo, valuing the company at $1.4 billion. Loan proceeds and an equity injection from Tencent will be used to clean the current shareholder equity waterfall, refinance the club debt facilities and pay financing fees.

“The Ba3 rating reflects Voodoo’s strong position in the growing mobile hypercasual game industry, the significant growth expected from its expansion in the APAC region and in new business segments such as casual games, and its modest and decreasing leverage, supported by strong EBITDA growth and solid free cash flow generation,” said Agustin Alberti, a Moody’s vice president, senior analyst and lead analyst for Voodoo, in a press release.

The outlook is stable. “The stable outlook on the ratings reflects Moody’s expectation that Voodoo’s operating performance will be solid, with strong revenue and EBITDA growth and solid free cash flow generation,” the agency said.

DBRS gives BBVA covered bond AAA

DBRS said it assigned an AAA rating to a new series of covered bonds issued by Banco Bilbao Vizcaya Argentaria SA under the BBVA covered bonds program.

The new bonds consist of €2 billion of floating-rate securities indexed to three-month Euribor + 0.20% maturing in October 2025.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.