S&P upgrades EPL Oil, notes

Standard & Poor's said it raised its corporate credit rating on EPL Oil & Gas Inc. to B+ from B, consistent with the existing corporate credit rating on parent company Energy XXI (Bermuda) Ltd.

The agency views EPL as core to Energy XXI's operations.

"We removed the ratings from CreditWatch, where we placed them with positive implications March 13, 2014, following Energy XXI's announcement of its plan to acquire EPL," S&P credit analyst Stephen Scovotti said in a news release.

The outlook on EPL is stable, reflecting that of Energy XXI.

S&P also raised the issue-level rating on EPL's senior unsecured notes (which remain outstanding following the completion of the transaction) to B from B-, one notch below the corporate credit rating. The recovery rating on the notes remains 5, indicating an expectation of modest (10% to 30%) recovery in the event of payment default.

The actions follow Energy XXI’s June 3 acquisition of EPL.

Fitch ups Harbinger to positive

Fitch Ratings said it has affirmed the long-term issuer default rating of Harbinger Group, Inc. at B and revised the outlook to positive from stable.

Fitch said it has also upgraded the company's senior secured debt to BB-/RR2 from B/RR4.

The revised outlook follows the completion of several transactions recently executed by Harbinger, which have improved the company's credit profile, in Fitch's view. These transactions have resulted in a stronger capital structure and a more diversified ownership base for the company.

Moody’s changes Quiksilver view to negative

Moody's Investors Service said it revised Quiksilver Inc.'s outlook to negative from stable.

The company's B3 corporate family rating and SGL-2 speculative grade liquidity rating were affirmed.

Moody’s said the outlook revision reflects the company's declining top-line performance with YTD revenues falling around 7% and this trend is expected to continued into the second half of fiscal 2014 (ends Oct. 31). As a result, Quiksilver expects adjusted EBITDA (as defined by the company) to be below the actual levels achieved in 2014; as a result, Moody's expects credit metrics will remain weak for an extended period of time.

S&P changes Taylor Wimpey to positive

Standard & Poor's said it revised its outlook on Taylor Wimpey plc to positive from stable.

At the same time, the agency affirmed its BB+ long-term corporate credit rating on Taylor Wimpey.

S&P said the outlook revision reflects its view that Taylor Wimpey's credit metrics have further improved, supported by strong market conditions in the U.K. housing sector. In addition, the positive outlook assumes increased stability in Taylor Wimpey's cash flow base going forward, as a result of the company's strong order book (£1.6 billion as of March 31) but also the low debt level.

S&P gives ContourGlobal notes BB-

Standard & Poor's said it assigned its BB- rating to ContourGlobal Power Holdings SA's $400 million senior secured notes due 2019.

The agency also assigned the notes a recovery rating of 2, indicating an expectation of substantial (70% to 90%) recovery in the event of a payment default.

In addition, S&P assigned its B+ corporate credit rating to ContourGlobal Power.

The corporate credit rating on ContourGlobal Power’s parent, ContourGlobal LP, was affirmed at B+.

The outlook is stable.

"The ratings reflect our view of the portfolio's significant concentration risk as well as its projects' locations, many of which are in areas with political uncertainty," S&P credit analyst Ben Macdonald said in a news release. "The ratings are also impacted by the portfolio's reliance on substantial distributions from jurisdictions with considerable regulatory and operating uncertainties."

S&P gives Gates Global loan B+, notes B

Standard & Poor's said it assigned its B+ corporate credit rating to Gates Global LLC.

At the same time, the agency assigned its B+ issue rating and 3 recovery rating to the company's proposed $2.8 billion senior secured term loan (which includes a €200 million tranche) and its $125 million cash flow revolver (undrawn at closing). The 3 recovery rating indicates an expectation for meaningful recovery (50%-70%) in a payment default scenario.

In addition, S&P assigned a B issue rating and 5 recovery rating to the proposed $1.4 billion of senior unsecured notes (which includes a €235 million tranche). The 5 recovery rating indicates an expectation for modest recovery (10%-30%) in a payment default scenario.

The company will use the debt proceeds along with equity contributions from the new sponsor to fund the acquisition. The transaction also includes a $325 million asset-based revolver (unrated) that would be undrawn at close.

S&P said the ratings on Gates incorporate aggressive financial policies associated with ownership by its new private equity sponsor, Blackstone.

"Given the very high leverage and lack of track record under the new owner we have limited reasons to believe that debt to EBITDA will fall below 5x in the next 2 years," S&P credit analyst Nishit Madlani said in a news release. "Our assessment also incorporates overarching risks involved with private equity ownership, and that we would closely monitor actions such as significant shareholder distributions or large debt-funded acquisitions. Blackstone has pursued an aggressive financial strategy with other portfolio entities, using debt and debt-like instruments to maximize shareholder returns, in the past."

S&P gives Men’s Wearhouse notes B-

Standard & Poor's said it assigned its B- issue-level and 6 recovery ratings to Men's Wearhouse Inc.'s proposed $600 million senior unsecured notes due 2022.

The 6 recovery rating indicates an expectation for negligible (0% to 10%) recovery in the event of payment default.

The net proceeds, together with borrowings on the company's new credit facilities and cash on hand, will be used to finance the acquisition of JoS. A Bank Clothiers, Inc.

S&P said the B+ corporate credit rating on Men's Wearhouse reflects the company's participation in the highly competitive and widely fragmented men's specialty apparel retail segment, good brand recognition and smaller relative size to primary competitors, which include moderate department stores.

The rating also incorporates the agency’s forecast of relatively consistent cash flow generation, debt to EBITDA in the upper-4x area, funds from operations to total debt in the low-double digits and interest coverage in the low-3x area over the next year.

Moody’s rates Men’s Wearhouse notes B2

Moody's Investors Service said it assigned a B2 rating to Men's Wearhouse, Inc.’s proposed $600 million senior unsecured notes due 2022.

The company’s Ba3 corporate family rating and probability of default rating, as well as the Ba2 rating on the company's $1.1 billion senior secured term loan B, were affirmed.

The SGL-2 speculative grade liquidity rating was affirmed and the outlook remains stable.

Moody’s said the B2 rating assigned to the notes reflects Men’s Wearhouse’s unsecured position, ranking behind a meaningful amount of secured debt in the company's capital structure comprised primarily of the $1.1 billion senior secured term loan B and the $500 million secured asset based revolving credit facility.

Men's Wearhouse will use the proceeds from the notes, the $1.1 billion term loan and cash on hand to fund the acquisition of Jos. A. Bank Clothiers, Inc. for $1.8 billion and to fund fees and expenses associated with the transaction.

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