S&P rates GTT loan B-

S&P said it assigned its B- issue-level rating and 3 recovery rating to GTT Communications Inc. and wholly owned subsidiary GTT Communications BV's $140 million incremental senior secured term loan B due 2025. The 3 recovery rating indicates an expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a payment default.

The company will use the proceeds to repay $129 million of borrowings under its $250 million senior secured revolving credit facility due 2023 and pay related fees and expenses.

“Because the transaction will not affect GTT's credit metrics, our B- issuer credit rating and negative outlook on the company remain unchanged. That said, we view the transaction favorably because it will bolster the company's liquidity position by freeing up revolver availability,” said S&P in a press release.

S&P lowers American Tire

S&P said it downgraded American Tire Distributors, Inc. to CCC+ from B- to reflect its higher-than-expected debt leverage. The agency trimmed the rating on the company’s $150 million term loan to B from B+ and dropped the rating on the $795 million to CCC+ from B-.

“The downgrade reflects our view that American Tire Distributors Inc. faces a number of key challenges. While operating efficiency trends improved in the second half of 2019, operating expenses have risen faster than sales and profits. Gross margins, though, have remained stable. Moreover, although the company replaced more than 50% of Goodyear Tire/Bridgestone volume in 2019, we believe the company has not yet fully replaced the business that it lost from Goodyear and Bridgestone with additional sales from other tire makers,” said S&P in a press release.

The outlook is stable.

Moody's cuts Gulfport

Moody's Investors Service said it downgraded Gulfport Energy Corp.'s corporate family rating to Caa1 from B2, probability of default rating to Caa1-PD from B2-PD and senior unsecured notes to Caa2 from B3. The speculative grade liquidity rating was downgraded to SGL-4 from SGL-3. The outlook remains negative.

"The downgrade reflects rising financial risks amid low natural gas prices and limited hedging protection in place for Gulfport in 2020. This required the company to significantly reduce investment and allow production to fall significantly in 2020 in order to avoid new borrowings," said Elena Nadtotchi, a Moody's vice president and senior credit officer, in a press release.

Gulfport plans to cut investment to match declining operating cash flow which will cause its production to fall by around 15% in 2020. The company's cash flows will be supported by hedging in the first part of 2020, as well as improved cash costs of production. Gulfport's proved developed reserve life is low compared to its direct peers and a lower level of investment will not allow Gulfport to fully replace produced reserves. Moody's said it expects returns on capital to be weak until the investment is restored to a sustaining level.

Fitch downgrades La Rioja

Fitch Ratings said it downgraded the province of La Rioja's long-term foreign- and local-currency issuer default ratings to C from CCC. In addition, Fitch downgraded the province's $300 million 9¾% senior unsecured notes due 2025 to C from CCC.

The downgrade of La Rioja's ratings follows the province missing a payment on its 9¾% senior unsecured notes debt service that was due Feb. 24, specifically an interest payment due for $14.625 million.

On Wednesday, the province announced its plans to begin conversations with its creditors concerning the adverse macroeconomic and public financial conditions the country faces, without fulfilling its debt service payment as per contractually stipulated. As stipulated on the notes' indenture, currently the province is in its 30-day grace period to fully comply with its financial obligations. The 30-day grace period expires on March 24, 2020, and failure to pay is considered an event of default in the transaction documents.

Moody’s cuts NMC, will withdraw ratings

Moody’s Investors Service said it downgraded NMC Health plc’s corporate family rating to Caa1 from Ba2 and the company’s probability of default rating to Caa1-PD from Ba2-PD. Moody’s also downgraded the rating of the $400 million of dollar-denominated trust certificates, or sukuks, of NMC Healthcare Sukuk Ltd. due 2023 to Caa1 from Ba2 and kept all ratings under review for downgrade. Moody’s will subsequently withdraw all ratings.

“The downgrade to Caa1 reflects a deepening of the governance shortfalls affecting the company. The recent removal of the CEO, absence of the CFO and suspension of a member of the treasury team points to significant weaknesses in terms of oversight, financial management and operational controls,” the agency said in a press release.

On Wednesday, NMC announced the independent review advisors identified supply chain financing arrangements which were used by entities controlled by Dr. B.R. Shetty and Khaleefa Butti Omair Yousif Al Muhairi and guaranteed by NMC. The company didn’t disclose the arrangements in its financial statements as required by the listing rules and they weren’t disclosed to or approved by the board. According to the announcement, the drawdown on the facilities was about $335 million as of Dec 31, which Moody’s considers a material amount.

Moody’s will withdraw all NMC ratings because it no longer trusts the company’s audited financial statements and there is uncertainty around the company’s leverage, cash position and liquidity profile. In addition, the review advisors identified potential discrepancies and inconsistencies in NMC’s bank statements and ledger entries.

Moody's downgrades Yida China

Moody's Investors Service said it downgraded Yida China Holdings Ltd.'s corporate family rating to Caa2 from Caa1. Moody's also downgraded the senior unsecured rating on the bond issued by Yida to Caa3 from Caa2. The outlook remains negative.

The actions follow the announcement of Yida's debt exchange offer on Thursday. The company proposed to exchange its $300 million offshore bond with 6.95% coupon issued in 2017 and maturing in April 2020, with 8% of the principal in cash, and the remaining 92% to be exchanged with new notes. The new notes, due in 2022, will bear interest at 10% per annum for the first six months and 14% per annum for the remaining term of the new notes.

The agency said the offer can be viewed as a distressed debt exchange.

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