Moody's downgrades CSM Bakery

Moody's Investors Service said it downgraded ratings of CSM Bakery Solutions Ltd. and subsidiaries, including the corporate family rating to Caa2 from Caa1, probability of default rating to Caa2-PD from Caa1-PD, first-lien term loan rating to Caa1 from B3 and second lien-term loan rating to Caa3 from Caa2.

The outlook is stable.

The downgrades reflect continued weak operating performance and eroding liquidity, which has become inadequate due to approaching debt maturities and liquidity facility expiration, Moody's said.

The agency said it does not expect that the company will generate a meaningful amount of free cash flow over the next year.

In recent years, CSM has reported weak operating performance, especially in its North America business, which has not fully recovered from the effects of major enterprise systems disruptions that began in late 2015, Moody's said.

The ratings also reflect the company high financial leverage, low profit margin, inadequate liquidity and poor future earnings visibility, the agency said.

Moody's lowers Commercial Barge

Moody's Investors Service said it downgraded the ratings of Commercial Barge Line Co., including the senior secured term loan to Caa3 from Caa2, corporate family rating to Caa2 from Caa1 and probability of default rating to Caa2-PD from Caa1-PD.

The outlook is negative.

The downgrade reflects concerns about Commercial Barge's elevated financial risk, given its high debt burden with relatively short-dated maturities and sustained weak liquidity profile, Moody's said.

These factors, compounded by the highly cyclical nature of the company's markets, raise concerns about the sustainability of its capital structure and the potential need for a debt restructuring event, the agency said.

The ratings reflect the highly leveraged balance sheet for the company's operating profile, given its weak liquidity and exposure to highly cyclical end markets and competitive pressures, Moody's said.

Moody's downgrades SM Energy

Moody's Investors Service said it lowered SM Energy Co.'s speculative grade liquidity rating to SGL-2 from SGL-1.

This had no effect on the company's credit ratings or stable outlook.

The SGL-2 liquidity rating reflects an expectation of good liquidity through early 2020, Moody's said.

Capital spending and debt repayment consumed most of SM's large cash balance, which had figured prominently in its SGL-1 liquidity rating, the agency said.

Ample availability under SM's $1 billion secured borrowing base revolving credit facility supports the SGL-2 as it continues to outspend cash flow to develop its production base in the Midland basin, Moody's said.

The company's B1 corporate family rating reflects its high debt levels and elevated execution and capital risks into 2020 as it transforms itself into a Midland basin-focused company from a historically Eagle Ford Shale-weighted producer, the agency said.

Moody's downgrades Zep

Moody's Investors Service said it downgraded Zep Inc.'s corporate family rating to Caa2 from B3 and the probability of default rating to Caa2-PD from B3-PD.

The agency also said it downgraded the company's first-lien senior secured credit facilities to Caa1 (LGD 3) from B2 (LGD 3) and second-lien term loan to Ca (LGD 5) from Caa2 (LGD 5).

The outlook is negative.

The downgrade reflects Zep's continued revenue and earnings decline, Moody's said, as well as the challenges related to its ongoing restructuring efforts.

Leverage on an adjusted basis has risen to about 10x for the trailing 12 months that ended in February, the agency said.

Moody's said it expects leverage to remain very high over the next 12- to 18-months.

S&P upgrades Aerojet Rocketdyne

S&P said it raised Aerojet Rocketdyne Holdings Inc.'s issuer credit rating on to BB- from B+.

The agency said it reviewed the company's ratings after it published revised ratios and adjustments criteria April 1.

The upgrade reflects Aerojet's improved operating performance as the company has shown it can compete in an industry affected by consolidation and new entrants, S&P said.

The agency said it now believes funds from operations-to-debt will be 30% to 35% in 2019 before increasing to 35% to 40% in subsequent years as potential acquisitions generate additional cash inflows.

The stable outlook reflects a belief that the company's credit metrics will remain stable as revenues grow modestly and EBITDA margins decline slightly, S&P said.

Moody's upgrades CareTrust REIT

Moody's Investors Service said it upgraded the corporate family rating of CareTrust REIT, Inc. to Ba2 from Ba3, along with the senior unsecured rating of its subsidiary, CTR Partnership, LP to Ba2 from Ba3.

Moody's also said it assigned a speculative grade liquidity rating of SGL-2 to CareTrust.

The outlook was revised to stable from positive.

The upgrades are primarily driven by the REIT's stronger cash flow metrics, continued reduction in tenant concentration and enhanced size and quality of the portfolio, achieved through a combination of strategic capital investments and acquisitions, the agency said.

CareTrust's investment focus is in skilled nursing facilities, which are highly dependent on reimbursements from Medicaid and Medicare and can be volatile from year to year, Moody's said.

The stable outlook reflects an expectation that CareTrust will continue to grow and diversify its tenant base while maintaining a conservative capital strategy, the agency said.

Fitch lifts Magnolia Oil & Gas

Fitch Ratings said it affirmed the issuer default ratings of Magnolia Oil & Gas Corp. and Magnolia Oil & Gas Operating LLC at B.

Fitch also said it revised the companies' outlooks to positive from stable.

The positive outlook primarily reflects recent increases in the company's size and scale linked to its strong operational performance, favorable impact of bolt-on acquisitions and continued conservative financial policies, Fitch said.

The ratings reflect the group's strong asset base, anchored by its position in the core of the Eagle Ford liquids window in Karnes County, along with its high exposure to liquids, the agency said.

Rating concerns include the company's smaller size and single basin exposure, modest acreage position in the Karnes field and lack of hedging, Fitch said.

S&P puts Parker-Hannifin on watch

S&P said it is placing all of Parker-Hannifin Corp.'s ratings, including its A issuer credit rating, on CreditWatch with negative implications.

The agency said it expects to resolve the CreditWatch placement following the close of the transaction.

S&P said it anticipates lowering the issuer credit rating on the company by one notch to A- when the transaction closes, which is expected to occur in mid- to late-2019.

Parker-Hannifin has entered into a definitive agreement to acquire materials science and motion control company Lord Corp. in a transaction valued at $3.675 billion, which it plans to finance solely with debt, including a mix of bonds, a term loan, and commercial paper, the agency said.

S&P said it expects the company's adjusted debt-to-EBITDA ratio will increase meaningfully and remain in the 2x to 2.5x range over the next two years, which is higher than the 2x downgrade threshold for the current rating.

The agency said it will resolve the CreditWatch when the acquisition closes.

S&P rates AssuredPartners notes CCC+

S&P said it affirmed a B long-term issuer credit rating and B corporate credit rating on AssuredPartners Inc.

The agency also said it affirmed all of the related existing issue-level and recovery ratings on the company's debt.

The outlook is stable.

These actions relate to the launch of deal financing announced in February 2019 that private equity firm GTCR LLC has agreed to acquire a majority stake in AssuredPartners from its current equity sponsor, Apax Partners, S&P said.

The agency also said it assigned CCC+ ratings with a 6 recovery rating to AssuredPartners' proposed $475 million senior unsecured notes due May 2027.

The transaction will primarily be funded by a GTCR equity contribution, cash on its balance sheet and the issuance of $160 million preferred shares, which will be treated as debt.

The stable outlook reflects expectations for enhanced scale with sustained revenue and earnings growth, which will facilitate de-leveraging and modestly stronger credit protection measures through 2020, S&P said.

The rating reflects a belief that, although the proposed incremental financing under private equity sponsor GTCR results in weaker credit metrics, sustained growth in revenue and earnings will result in strengthening cash flow generation, enabling it to carry this increased debt load and de-leverage modestly during the next year, the agency said.

Moody's rates Celanese notes Baa3

Moody's Investors Service said it assigned a Baa3 rating to $500 million of senior unsecured notes due 2024 to be issued by Celanese U.S. Holdings LLC, a wholly owned subsidiary of Celanese Corp.

The proceeds will be used for general corporate purposes, including the repayment of €300 million of notes due in 2019 and repayment of roughly $150 million outstanding under the revolver, the agency said.

The outlook is positive due to the expectation that the company will maintain strong credit metrics despite the recent reduction in acetyls profitability, Moody's said.

Celanese is taking advantage of the attractive debt markets to refinance maturities and reduce revolver borrowings, the agency said.

The ratings reflect the guarantees from its parent, Celanese Corp., Moody's said.

Celanese's investment-grade credit profile is supported by the company's size and leading global positions in the acetyl chain, sustained growth and profitability in its engineered materials business, strong credit metrics and substantial operational, geographical and product diversity, the agency said.

The positive outlook reflects a view that credit metrics will remain strong over the next several years due to further upside to the engineered materials business and limited downside in the acetyls chain, Moody's said.

Moody's rates Cleveland-Cliffs notes B1

Moody's Investors Service said it assigned a B1 (LGD 4) rating to Cleveland-Cliffs Inc.'s proposed $750 million guaranteed senior unsecured notes due in 2027.

The B1 corporate family rating, B1-PD probability of default rating, SGL-1 speculative grade liquidity rating and all other instrument ratings are unchanged.

The outlook remains stable.

The proceeds will be used to repay in full the 4 7/8% senior notes due 2021 of which $114 million is outstanding as of March 31, Moody's said.

Another $600 million of proceeds will be used to tender for a portion of the 2025 guaranteed senior unsecured notes, the agency noted.

The balance of the proceeds will be held in cash, Moody's said.

The ratings reflect the company's improved operating performance, strengthened debt protection metrics, its focus on debt reduction and strong position in the North American iron ore markets, the agency said.

The ratings also consider the contract nature of the company's iron ore operations and the symbiotic relationship with U.S. blast furnace steel mills, Moody's said.

The ratings also take into account the improved fundamentals in the United States steel industry on strengthened demand across many end markets, the agency said.

S&P rates Lear notes BBB-

S&P said it assigned a BBB- rating to Lear Corp.'s proposed senior unsecured notes.

The agency said it expects the company to use the net proceeds from these notes to redeem $325 million of its existing 2024 notes and fund a portion of the $320 million cash cost for its acquisition of Xevo Inc.

S&P said it anticipates that the transaction will add about a quarter turn to Lear's debt-to-EBITDA ratio, thus its leverage will still be in line with estimates of about 0.5x to 1x in 2019.

The positive outlook on Lear reflects the potential that S&P will upgrade the company to BBB in 2019 if it appears likely to sustain its recent margin improvements amid the softening automotive demand in North America, heightened competition in Europe and China and potentially higher pricing pressure from its customers, the agency said.

The senior unsecured notes will rank equally in right of payment with all of Lear's existing and future senior unsecured debt, S&P said.

Based on the company's current consolidated capital structure and its investment-grade credit rating, the agency said it does not believe that the unsecured debtholders are inherently disadvantaged by any priority debt.

Moody's rates Lower Cadence loan B2

Moody's Investors Service said it assigned first-time ratings to Lower Cadence Holdings LLC (Oryx), including a B2 corporate family rating, a B2-PD probability of default rating and a B2 (LGD 4) senior secured term loan rating.

The outlook is stable.

Stonepeak Cadence Holdings, LLC, an affiliate of Stonepeak Infrastructure Partners, will be acquiring all subsidiaries of Oryx Southern Delaware Holdings, LLC (Oryx I) and Oryx Delaware Holdings, LLC (Oryx II).

The transaction will consolidate Oryx I and Oryx II into a single borrower and the purchase will be partially funded through the proceeds of the proposed $1.5 billion senior secured term loan.

When the transaction closes, the existing Oryx I's $800 million senior secured term loan and the $80 million super priority revolver will be refinanced, Moody's explained.

Moody's said it will withdraw the existing ratings of Oryx I, including its B2 corporate family rating, upon the closing of the proposed acquisition.

Combining Oryx I and Oryx II into one entity reduces the structural complexity as Oryx I was operationally reliant on an affiliated, the agency explained, but external entity Oryx II.

The ratings reflect the company's high financial leverage and increased scale from the combination of Oryx I and Oryx II, Moody's said, along with its geographic concentration.

The ratings benefit from 100% fixed-fee acreage dedication contracts with customers that have aggressive volume growth plans, the agency said.

Fitch rates National Rural notes BBB+

Fitch Ratings said it assigned an expected rating of BBB+ to National Rural Utilities Cooperative Finance Corp.'s proposed issuance of $100 million in fixed-rate subordinated deferrable debt.

The subordinated deferrable debt is expected to represent an unsecured obligation of the company, ranking junior in the right of payment to all of its current and future senior debt, Fitch said.

Distributions on the subordinated deferrable debt are expected to be cumulative for up to 40 consecutive quarterly periods, the agency said.

The debt is expected to have a maturity date in 2064, but may be redeemed, at National Rural Utilities' option, five years following the issuance, Fitch noted.

The proceeds will be used for general corporate purposes.

The ratings are supported by the company's unique competitive position within the electric cooperative lending space, strong asset quality, sufficient liquidity, funding diversity and adequate coverage of interest expenses, Fitch said.

The ratings are constrained by relatively higher leverage compared to peers, unique capital structure and inability to access the equity markets and modest earnings given the company's business model, the agency said.

S&P rates Norfolk Southern notes BBB+

S&P said it assigned a BBB+ rating to Norfolk Southern Corp.'s proposed senior unsecured notes due 2049.

The company will use about $500 million of the proceeds from these notes to repay debt due June 15, the agency said, and use the remaining balance for general corporate purposes.

Norfolk Southern is issuing add-ons to its existing 3.8% senior unsecured notes due 2028 and 5.1% senior unsecured notes due 2118.

The ratings on the notes are unchanged.

The issuer credit rating on Norfolk Southern reflects a favorable view of the North American freight railroad industry, given the limited competition from alternative modes of commercial freight transport, substantial barriers to entry and the moderate cyclicality, S&P said.

The rating also is based on the company's strong competitive position, extensive rail network, diverse revenue streams and strong operating efficiency, the agency said.

Fitch rates PCI Gaming loan BBB-

Fitch Ratings said it assigned a first time BBB- issuer default rating to PCI Gaming Authority.

Fitch also said it assigned a rating of BBB- to PCI's announced issuance of a $1.4 billion senior secured credit facility, consisting of a $100 million revolver and $1.3 billion term loan.

The outlook is stable.

The ratings reflect PCI's strong credit metrics, favorable operating environment in Alabama and geographic diversification not typically seen in Native American gaming, Fitch said.

Geographic diversification will further improve with the pending acquisition of Sands Bethlehem in Pennsylvania, the agency said.

The ratings also consider the tribe's conservative financial policy and strong liquidity, Fitch said.

Gross leverage is 2.2x, pro forma for the Sands Bethlehem acquisition and is forecasted to decrease to less than 2x by 2020, the agency said.

Fitch said it expects a majority of free cash flow to be applied toward debt paydown through the forecast period, in excess of scheduled amortization.

S&P rates PCI Gaming BB+

S&P said it assigned a BB+ issuer credit rating PCI Gaming Authority, which does business as Wind Creek Hospitality.

The BB+ rating on PCI Gaming reflects a forecast for modest leverage, strong operating cash flow generation and high EBITDA margin, the agency said.

PCI's low pro forma leverage, combined with its tax-free status as a tribal entity, enables it to convert a high percentage of EBITDA to operating cash flow, which it can use to repay debt after it makes anticipated distributions to the tribe and funds property improvements, S&P said.

PCI also benefits from a currently protected position in its primary markets in central and southwest Alabama, with minimal competition within a short driving time of its main facilities, the agency said.

The stable outlook reflects an expectation for continued steady EBITDA generation at its Alabama properties, S&P said, as well as the successful acquisition and integration of Sands Bethlehem.

S&P downgrades Rowan

S&P said it lowered the issuer credit rating on Rowan Cos. plc to B- from B.

The agency also said it raised the B- ratings on Rowan's unsecured notes to B and revised the recovery ratings on the notes to 2 from 5, indicating 70% to 90% expected default recovery.

Rowan and Ensco have completed their merger. The merged company is known as Ensco Rowan plc, S&P said.

S&P also said it withdrew the rating on Rowan's credit facility following its termination in conjunction with the merger.

The negative outlook reflects an expectation that Ensco Rowan's credit measures will be weak for the ratings over the next year, including its debt-to-EBITDA ratio of 10x on average over the next couple of years.

S&P said it lowered the issuer credit rating on Rowan to equalize it with that of Ensco Rowan, as it is now considers Rowan to be a core entity of the combined company.

The agency said it believes Ensco Rowan will likely provide long-term support for Rowan, which represents a substantial proportion of the combined company's asset portfolio.

S&P rates PVH loan BBB-, lowers notes to junk

S&P said it assigned a BBB- rating to PVH Corp.'s new $2.65 billion dollar-denominated unsecured credit facility due in April 2024.

The facility comprises a $675 million revolver, C$70 million revolver, €200 million euro-denominated revolver, $50 million Asian revolver, €500 million term loan A and $1.093 billion term loan A.

The agency also said it lowered the rating on the company's $100 million 7¾% debentures due in 2023 to BB+ from BBB-.

That's because this debt instrument becomes unsecured and unguaranteed in conjunction with the transaction, thus subordinated to the proposed credit facility, S&P explained.

The company's capital structure also includes 3 5/8% and 3 1/8% senior unsecured and unguaranteed notes. The ratings on these notes remain at BB+.

PVH plans to use the proceeds to refinance its $1.65 billion outstanding senior secured term loan A.

The company also is upsizing its revolving credit facility to $1 billion from $710 million.

The company had no borrowings outstanding under its revolving credit facilities at the end of its fiscal year.

The transaction is essentially leverage neutral with pro forma leverage remaining of about 2.5x, S&P said.

The agency said it expects to withdraw the BBB- rating on the existing facility following completion of the transaction.

The proposed credit facility is unsecured and will be initially guaranteed by each of the company's wholly owned domestic subsidiaries, S&P said.

The ratings reflect the company's strong brand portfolio, geographic diversification, good profitability, efficient global supply chain and continued appetite for acquisitions, the agency said.

S&P said it expects the company to end the fiscal year with an adjusted leverage of less than 3x.

Moody's upgrades PVH, rates loan Baa2

Moody's Investors Service said it upgraded PVH Corp.'s senior unsecured notes to Baa3 from Ba2.

Moody's also said it assigned Baa2 ratings to PVH's proposed $2.65 billion senior unsecured credit facilities consisting of about $1 billion initially guaranteed multi-currency revolving credit facility and about $1.65 billion initially guaranteed multi-currency term loan A.

The rating on PVH's senior secured debentures due 2023 was affirmed as they will transition back to unsecured upon repayment of PVH's existing secured credit facilities.

The outlook was changed to stable from positive.

The proceeds from the proposed senior unsecured term credit facilities and cash will be used to refinance all of the company's debt under its existing senior secured credit facilities, Moody's said.

Due to PVH's investment-grade status, Moody's said it withdrew the company's Ba1 corporate family rating, Ba1-PD probability of default rating and SGL-1 speculative grade liquidity rating.

The company's existing senior secured credit facilities also were affirmed at Baa3 and will be withdrawn upon completion of the refinancing.

The upgrades reflect PVH's improved credit profile, as reflected in its consistent operating performance, strong free cash flow generation, debt reduction and improved credit metrics, Moody's said.

While the agency said it expects the company will look to augment organic growth with acquisitions over time, S&P said it also expects that it will remain committed to reducing acquisition debt and maintaining an investment-grade profile.

The ratings reflect the company's strong market position and diversity, including ownership of two multi-billion dollar lifestyle fashion brands with global presence and broad lifestyle appeal, the agency said.

S&P lifts United Continental view to positive

S&P said it affirmed the BB issuer credit ratings on United Continental Holdings Inc. and subsidiary, United Airlines Inc., and revised the outlook to positive from stable.

The agency also said it affirmed the BBB- rating on secured bank facilities with a 1 recovery rating, indicating 90% to 100% expected default recovery.

S&P also said it affirmed the company's BB rating on senior unsecured debt with a 3 recovery rating, indicating 50% to 70% expected default recovery.

The agency also said it affirmed the BB rating on various airport revenue bonds of United Airlines.

United Continental continues to generate solid earnings and cash flow, including a strong first quarter 2019, S&P said.

These gains, plus expected roughly flat debt levels, should lead to gradually improving credit measures, the agency said.

S&P said it expects improving earnings and credit measures in 2019.

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