Moody's confirms Hanover Compressor

Moody's Investors Service confirmed its ratings on Hanover Compressor and Hanover Equipment Trust. The outlook is negative. Ratings affected include Hanover Compressor's $86 million of non-guaranteed parent company trust convertible preferreds at B1 and $192 million of 4.50% non-guaranteed parent senior convertible notes due 2008 at Ba3, and Hanover Equipment Trust's $300 million of 8.50% 2001A partially secured senior bullet notes due 2008 and $250 million of 8.75% 2001B partially secured senior bullet notes due 2011, both at Ba3.

Moody's said Hanover Compressor's disclosure issues and risks seem manageable for the ratings if the company reduces leverage.

Supporting the ratings are durable cash flow and a sound business position and growth outlook, Moody's said. It noted the ratings have always incorporated debt plus leases, on- or off-balance sheet.

The rating agency has a negative outlook because of the combined pressures of a strong growth bias, leverage and recent rise in debt, weakened though recovering equity, and need to absorb shareholder lawsuits and resolve SEC matters.

Moody's said it will keep the outlook at negative pending a material decline in consolidated leverage; release of fourth quarter 2001 results; reversal of the factors affecting those results; and improving consolidated returns.

Moody's cuts Airgas to junk

Moody's Investors Service downgraded Airgas Inc. to junk, lowering its senior unsecured notes to Ba1 from Baa3 and subordinated notes to Ba2 from Ba1. At the same time Moody's upgraded Air Products and Chemicals Inc. to A2 from A3.

Moody's said its action completes a review begun Jan. 4 when the companyies announced that Airgas and an affiliated company would acquire the vast majority of Air Products' U.S. packaged gas business in a transaction valued at $270 million. Airgas took on $236 million of extra debt to fund its portion of the purchase price.

Moody's said that for Airgas the transaction "represents a very strategic link-up with a major global producer of industrial gasses, which will likely improve Airgas' long-term growth and competitive position in the US market."

However, in the near term the level of total debt will not support an investment grade rating, Moody's said.

Moody's anticipates retained cash flow to adjusted total debt can reach the mid-teens within the next 12 to 18 months and that EBITA to interest coverage will remain above 2.5 times. A fall much below those levels could prompt a further review of Airgas' ratings.

S&P rates new B&G notes B-, raises outlook

Standard & Poor's assigned a B- rating to B&G Foods Inc.'s new offering of $100 million 9.625% senior subordinated notes due 2007 and raised the company's outlook to stable from negative.

S&P upgrades DR Horton

Standard & Poor's upgraded D.R. Horton Inc. including raising its $100 million 9% senior unsecured notes due 2008 and $250 million 9.375% senior unsecured notes due 2009 to BB from B+ and its $150 million 10.5% senior subordinated notes due 2011 to B+ from B-.

S&P puts Benton Oil on positive watch

Standard & Poor's put Benton Oil & Gas Co. on CreditWatch with positive implications.

Ratings affected include Benton's $125 million 11.625% senior notes due 2003, $115 million 9.375% senior notes due 2007 and $108 million 9.375% senior unsecured notes due 2007, all at B-.

Moody's lowers Murrin Murrin

Moody's Investors Service downgraded Murrin Murrin Holdings Pty Ltd.'s senior secured bonds to Caa3 from B3. Ratings affected include Murrin Murrin's $340 million senior secured fixed rate notes due 2007 and its $64 million senior secured floating rate notes due 2005. The ratings were put on downgrade review on Feb. 13, 2002.

Moody's said it began the review because of the depressed environment for nickel prices, the inconsistent performance of the Murrin Murrin project and the significant liquidity pressures facing Murrin Murrin Holdings.

The downgrade reflects all those factors plus the announcement by Murrin Murrin's parent Anaconda Nickel Ltd. that it has been in default under the floating rate note indenture since 1999 due to its failure to lodge the full amount of cash in the debt service reserve. The indenture requires six months interest and two quarterly principal payments of $2 million but Murrin Murrin has been lodging the equivalent of six months of interest and one quarterly payment only.

Anaconda also said it does not expect to be able to replenish the fixed rate notes debt service reserve in March 2002 and beyond which would constitute an event of default, Moody's said.

Moody's downgrades Glencore Nickel

Moody's Investors Service downgraded Glencore Nickel Pty Ltd. and kept the ratings on review for further downgrade. Ratings affected include Glencore Nickel's $300 million senior secured fixed notes due 2014.

Moody's said its action reflects the inconsistent and weak operating performance of the project and the increased uncertainty arising from the significant liquidity problems facing Murrin Murrin Holdings Pty Ltd. and its parent Anaconda Nickel Ltd, which owns 60% of the Murrin Murrin project. Glencore International AG rated Baa2 and ultimate parent of Glencore Nickel owns 40% of the project.

Moody's also said the downgrade reflects uncertainty about further support from Glencore International AG given the project's weak performance and said it believes there is an increasing likelihood of a debt restructuring.

Fitch rates Trenwick Re at BB-

Fitch Ratings assigned a BB- long-term issuer rating to Trenwick Group, Ltd., Trenwick America Corp. and LaSalle Re Holdings, Ltd. and a BB- rating to Trenwick America's senior notes due 2003, a B+ rating to Trenwick Capital Trust I's preferred capital securities due 2037 and a B rating to LaSalle Re's cumulative preferred stock. The Rating Outlook is Evolving.

Fitch said ratings for Trenwick are heavily influenced by the company's non-laddered debt structure, which exposes the group to significant refinancing risk.

The rating agency noted Trenwick is currently evaluating options to term out a portion of its debt structure.

"If the company completes this process on favorable terms and profitability improves, the ratings will likely be upgraded," Fitch commented. "Conversely, if the company is unable to restructure its current debt structure and its profitability remains poor, the ratings may be downgraded."

Moody's rates Rotech notes B2

Moody's Investors Service assigned a B2 rating to Rotech Healthcare, Inc.'s $300 million senior subordinated notes due 2012 and a Ba2 rating to its $275 million senior secured credit facilities due 2008. The outlook is stable. The debt is part of the exit financing for a reorganization that will see Rotech separate from its parent Integrated Health Services, Inc.

Moody's said the ratings reflect Rotech's "anticipated moderate leverage and interest coverage, its high level of DSOs, the high reliance on government reimbursement and concerns over potential reimbursement cuts for nebulizer medications."

The ratings also incorporate "the highly competitive nature of the HME business, a contemplated resumption of the company's acquisition strategy and the potential for disruptions from further consolidation of the company's billing centers."

Positives include Rotech's improving operating efficiencies and operating trends including cash flow generation, the shift in focus away from acquisitions to operations in recent years, the company's position as one of the leading providers in the HME business, its post-bankruptcy "clean slate" relating to government investigations and good demographic and industry trends, Moody's added.

Moody's lifts Petrobras outlook to positive

Moody's Investors Service raised its outlook for Petroleo Brasileiro's (Petrobras) foreign currency bonds to positive from stable.

The action follows a similar change in Brazil's B1 foreign currency country ceiling for bond and notes.

Moody's lowers Ifco notes

Moody's Investors Service downgraded Ifco Systems NV's notes, confirmed its bank debt and kept the ratings on negative outlook. Ratings affected include Ifco's senior implied rating, lowered to Caa2 from Caa1, unsecured issuer rating lowered to Ca from Caa2, €200 million 10.625% senior subordinated notes due 2010 lowered to Ca from Caa3 and $109.8 million senior secured credit facilities due 2003 affirmed at Caa1.

Moody's said it downgraded Ifco because of "acute concerns" about Ifco's ability to continue servicing current debt levels in the context of its operating and financial strategy.

In particular, Moody's said Ifco's current interest expense burden will materially impede the growth in internal cash flow generation required to turn around the business and ensure the ultimate survival of the company.

The rating agency said it expects Ifco to seek a debt restructuring in the near term. Such a restructuring would be a default under Moody's criteria, as would failure to meet the next interest payment on the senior subordinated notes due on March 15.

Moody's said it confirmed the rating on Ifco's senior secured credit facilities because it believes the business and asset base should provide sufficient value to support recovery prospects to senior secured creditors in a distressed scenario.

S&P downgrades Murrin Murrin, Glencore Nickel

Standard & Poor's downgraded Murrin Murrin Holdings Pty. Ltd. including lowering its $340 million 9.375% senior secured notes due 2007 and $62 million floating rate notes due 2005 to CC from B+. The ratings remain on CreditWatch with negative implications.

S&P also lowered Glencore Nickel Pty Ltd. including cuttings its $300 million 9% senior secured bonds due 2014 to CC from BB-. The ratings also remain on CreditWatch with negative implications.

S&P puts AES Drax on watch

Standard & Poor's put AES Drax Energy Ltd. on CreditWatch with negative implications. Previously the ratings had a negative outlook.

Ratings affected include AES Drax's £135 million 11.25% bonds due 2010 and $200 million 11.5% bonds due 2010, both rated B+.

S&P rates Rotech bonds at B+

Standard & Poor's assigned a B+ rating to Rotech Healthcare Inc.'s $300 million senior subordinated notes due 2012 and a BB rating to its $200 million term loan tranche B due 2008 and $75 million revolving credit facility due 2007. The outlook is stable.

Moody's changes Marlim outlook to positive

Moody's Investors Service changes its outlook on Companhia Petrolifera Marlim's medium-term notes to positive from stable. The notes are rated B1.

The action follows a similar change in Brazil's B1 foreign currency country ceiling for bond and notes.

© 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.