Fitch lowers GKN to stable

Fitch Ratings said it revised GKN Holdings plc's outlook to stable from positive and affirmed its long-term issuer default rating and senior unsecured rating at BBB- and short-term issuer default rating at F3.

The outlook change reflects a view that GKN is unlikely to achieve the previously envisaged improvement in its margins, especially the free cash flow margin, Fitch said.

The company has not met, and is unlikely to meet, in the short- to medium-term, two of the three upgrade guidelines, Fitch explained, although the overall financial profile remains strong for the BBB- rating.

S&P downgrades Allstate

S&P said it lowered the short-term counterparty credit rating and commercial-paper ratings on Allstate Corp. to A-2 from A-1.

The agency also said it revised the short-term counterparty credit and commercial-paper ratings on Allstate due to a criteria misapplication of the agency’s methodology for linking short-term and long-term ratings for corporate, insurance and sovereign issuers.

Fitch upgrades Constellation

Fitch Ratings said it upgraded the ratings of Constellation Brands, Inc., including the company's issuer default rating to BBB- from BB+.

The outlook is stable.

The upgrade reflects the expected continuation of strong operating momentum and an expectation that leverage will be managed to Constellation's net debt-to-EBITDA of 3.5x versus previous target of 3x to 4x, Fitch said.

Constellation's cash priorities are focused on growth investments, a dividend pay-out ratio in the 25% to 30% range, opportunistic mergers and acquisitions and share repurchase strategy within the context of operating within its leverage target, the agency said.

Constellation has substantial financial flexibility to manage capital-allocation priorities due to its increased scale, above-average revenue prospects, EBITDA growth in the low double-digit range and expected strong free cash flow generation, Fitch said.

The ratings also consider the company's leading market positions and well-known liquor portfolio, the agency said.

S&P: Equity One on positive watch on merger news

S&P said it affirmed the BBB+ corporate credit rating on Regency Centers Corp. and its operating partnership, Regency Centers LP.

The outlook is stable.

S&P also said it affirmed the BBB+ issue-level rating on the company's senior unsecured notes and the BBB- issue-level rating on its preferred shares.

The affirmations follow news that Regency entered into a definitive merger agreement with Equity One Inc. in a stock-for-stock deal.

Equity One common stock is expected to be converted into 0.45x shares of newly issued Regency common stock, S&P explained.

While Regency’s ratings were affirmed, the agency also placed Equity One’s on CreditWatch with positive implications.

Shareholder approval and closing is expected to occur in the first half of 2017, S&P said.

As part of the combined entity, the agency also said it believes Equity One will benefit from greater scale, which should promote enhanced cost efficiencies.

S&P also said it believes the deal enhances Regency's portfolio by improving its scale, scope and diversification.

Fitch affirms Regency on merger news

Fitch Ratings said it affirmed the ratings on Regency Centers Corp. and its operating partnership Regency Centers, LP at BBB+ upon news that it will acquire Equity One, Inc. in an all-stock transaction.

The outlook is stable.

Fitch said it views the transaction positively given the quality of Equity One’s portfolio, its geographic overlap with Regency’s high barrier markets and the potential for the issuer to have improved access to debt and equity capital as the largest shopping center REIT.

These positive elements are unlikely to result in a materially stronger credit at the onset, but could over time, the agency explained.

A key factor for positive momentum is the demonstration for Regency’s market-leading capital markets access across the broader REIT universe, Fitch said.

The agency said it will watch to see whether this occurs as a result of the transaction.

S&P rates AEP Transmission notes BBB+

S&P said it assigned a BBB+ rating to AEP Transmission Co. LLC's $700 million senior unsecured notes that are issued in two tranches due in 2026 and 2046.

The agency also said it placed the ratings on CreditWatch with positive implications.

The notes are senior unsecured obligations of AEP Transmission and are not disadvantaged by the existence of material priority obligations and liabilities at the company’s operating subsidiaries, S&P explained.

The proceeds will be used to repay $300 million of a term loan and advances from affiliates under the intercompany money pool, the agency said.

The ratings consider the generally constructive regulatory framework for electric transmission companies overseen by the Federal Energy Regulatory Commission (FERC) and somewhat smaller footprint and scale of operations, S&P said.

Moody’s gives AEP Transmission notes A2

Moody's Investors Service said it affirmed the A2 issuer rating for AEP Transmission Co., LLC's (AEP Transco), American Electric Power Co.'s (Baa1, stable) intermediate transmission holding company, and assigned an A2 rating to AEP Transmission’s proposed $700 million of senior notes.

Proceeds will be used to repay about $300 million of debt outstanding and for general corporate purposes, including ongoing capital expenditures.

The outlook is stable.

"AEP Transco's A2 rating is driven by its business risk profile as a transmission only holding company operating under the credit supportive regulatory framework established by the Federal Energy Regulatory Commission (FERC)," Moody’s senior credit officer Laura Schumacher said in a news release.

The rating reflects the predictable and timely nature of cash flows that are derived from forward looking formula based rates and the resulting solid credit metrics, the agency added.

The rating also considers the significant capital expenditure programs that are underway at all of AEP Transmission's operating subsidiaries as well as the experience and long track record of its parent company, AEP, in building and operating transmission projects, Moody’s explained.

Moody’s assigns Baa1 to Saputo notes

Moody's Investors Service said it assigned a Baa1 senior unsecured rating to Saputo Inc.'s C$300 million in notes issued under its C$2 billion medium-term note program.

The company plans to use the net proceeds to repay existing debt and for general corporate purposes.

Moody’s said the Baa1 senior unsecured rating is primarily driven by the company's long history of strong credit metrics, good market share positions in dairy processing, good geographic and product diversification and strong free cash flow after modest dividends.

Growth has come mostly from acquisitions, which the rating anticipates will continue but with disciplined execution, the agency added.

DBRS: Saputo notes A (low)

DBRS said it assigned a rating of A (low) with a stable trend to Saputo Inc.’s C$300 million series 3 medium-term notes offering.

The senior unsecured debt issuance is made up of a single tranche of C$300 million series 3 medium-term notes due 2023.

The notes will be unsecured obligations and rank pari passu with Saputo’s existing and future senior indebtedness, the agency said.

Saputo is expected to use the proceeds to repay indebtedness outstanding under its credit facility and for general corporate purposes, DBRS said.

Moody’s assigns Baa3 to ITV notes

Moody's Investors Service said it assigned a Baa3 rating to the proposed benchmark (around £500 million or equivalent) British pound- or euro-denominated senior unsecured notes being issued by ITV plc.

ITV’s senior unsecured issuer rating, as well as the ratings on all of its existing senior unsecured debt remain unchanged, at Baa3.

The outlook is stable.

Proceeds from the notes will be used to refinance some or all of: (a) The £161 million bond maturity in January 2017; (b) existing drawings under the revolver; and (c) the bi-lateral loan facilities (£250 million maturing in March/June 2017). Remainder of the proceeds will be used for general corporate purposes.

While there will be some grossing up of cash on ITV's balance sheet until the debt repayments are addressed, Moody's said it currently expects the re-financing transaction to end up being largely leverage neutral.

The note issuance will help improve ITV's liquidity and debt maturity profile.

"While ITV's advertising revenues is likely to remain under pressure in 2017, the company's Baa3 rating is supported by the expected good organic growth in its content business," Gunjan Dixit, Moody's vice president, senior analyst and lead analyst for ITV, said in a news release.

Fitch rates Eastman notes BBB

Fitch Ratings said it assigned a rating of BBB to Eastman Chemical Co.'s issuance of senior unsecured notes.

The outlook is stable.

The proceeds will be used to partially fund the redemption of the 2017 and 2018 notes, a tender for portions of the 2021 to 2027 notes and for general corporate purposes, Fitch said.

The ratings reflect Eastman's diversity of chemical products, strong market positions in key end-user markets, vertical integration of production along its acetyl, polyester and olefin product chains and strong operating margins, the agency said.

The ratings also are supported by the company's efforts to expand into higher margin, higher growth businesses, Fitch said.

Offsetting factors include the company's exposure to volatility in raw materials and energy costs, the agency added.

Moody’s rates MasterCard notes A2

Moody's Investors Service said it assigned an A2 rating to MasterCard Inc.’s proposed senior unsecured note issuance.

The outlook is stable.

Net proceeds are expected to be used for general corporate purposes, including growth investments and share repurchases.

With MasterCard's proposed debt issuance, Moody's said it expects the company's leverage will remain low within the long-term target of 1 time or less adjusted debt to EBITDA.

The A2 rating benefits from MasterCard's strong market position within the payment ecosystem, globally recognized brand, very high barriers to entry and favorable long-term growth prospects created by the secular trend toward electronic payments, the agency added.

The rating is also supported by a customer base of banks secured by long-term contracts and strong operating performance driven by growth in volumes processed through the company’s highly scalable processing platform.

S&P rates Mastercard notes A

S&P said it assigned an A rating to Mastercard Inc.'s senior unsecured notes due 2021, 2026 and 2046.

The issuer credit rating on Mastercard remains at A/A-1 with a stable outlook.

The proceeds will be used for general corporate purposes, including investments in growth, shareholder returns and funding for working capital, S&P said.

Given the company's significant holdings of surplus cash and cash equivalents, net debt is zero, the agency said.

S&P said it expects MasterCard to continue to operate with funds from operations-to-debt at higher than 60% and adjusted debt-to-EBITDA at less than 1.5x.

DBRS confirms Citizens Financial

DBRS said it confirmed the issuer and senior debt rating of Citizens Financial Group, Inc. at BBB (high), as well as the A (low) deposits and senior debt ratings for Citizens Financial Group’s bank subsidiaries, Citizens Bank of Pennsylvania and Citizens Bank, NA.

The agency also said it confirmed the short-term instruments rating of Citizens at R-2 (high).

The trend on all of the ratings at the holding company and the long-term ratings at the bank subsidiaries have been revised to positive.

The short-term ratings at the bank subsidiaries also were confirmed with a stable trend, DBRS said.

The actions follow a detailed review of the company’s operating performance, financial fundamentals and future prospects, the agency said.

The ratings reflect the group’s well-established regional banking franchise, which benefits from strong competitive positions in key markets, DBRS said.

The ratings also consider its sound asset quality, solid funding and liquidity positions and robust capital profile, the agency added.

Moody’s gives Eastman Chemical notes Baa2

Moody's Investors Service said it assigned a Baa2 rating to Eastman Chemical Co.’s offering of new unsecured euro notes and a provisional Baa2 rating to its universal shelf registration.

The Baa2 rating on the 1.5% euro notes due 2023 remains unchanged.

As part of this offering, Eastman will be adding to the 2023 notes it issued in May 2016, as well as issuing new debt from its shelf registration.

The company intends to issue new senior unsecured euro notes to fund a previously announced tender offer of up to $400 million, redeem its 6.3% 2018 notes, redeem a portion of its outstanding 2.4% 2017 notes, and for general corporate purposes.

The outlook is stable.

"Eastman is taking advantage of the low rates in the euro market to refinance near-term maturities and a portion of its higher cost debt," Moody’s senior vice president John Rogers said in a news release.

Moody’s said the Baa2 rating reflects Eastman’s size, product diversity, geographic diversity, vertical integration, specialty EBITDA margins (greater than 15% of sales) in its five business segments and strong free cash flow generation.

Moody’s: Gas Networks Ireland note program A3

Moody's Investors Service said it assigned a provisional A3 rating to Gas Networks Ireland’s new €1.5 billion euro medium-term note program.

Concurrently, the agency affirmed the A3 long-term issuer rating and the P-2 short-term issuer rating.

The outlook remains stable.

The provisional A3 rating of the new program is aligned with Gas Networks Ireland’s A3 issuer rating, reflecting that notes issued under the program will be senior unsecured obligations of the company.

Moody’s said the A3 rating reflects: (a) The low business risk profile of its gas transmission and distribution business operating under a transparent and predictable regulatory regime; (b) solid performance against the regulatory contract in the current period; (c) a mature asset base and modest level of capital expenditure; (d) gearing very comfortably below 60% net debt/Regulatory Asset Value (RAV); and (e) a business adequately ring-fenced from the start-up water utility Irish Water (owned by Gas Networks Ireland’s parent Ervia but with economic risk and reward borne by the Irish Government).

S&P: HollyFrontier unchanged on add-on

S&P said the BBB- rating on HollyFrontier Corp.'s $250 million 5 7/8 % senior unsecured notes due 2026 is unchanged after the company announced its intention to add on to the issue.

The proceeds from the add-on will be used for general corporate purposes, which may include a portion of the purchase price for Petro-Canada Lubricants Inc. and capital spending.

HollyFrontier owns and operates five refineries that have a combined crude oil processing capacity of 457,000 barrels per day, S&P explained.

The company has a BBB- corporate credit rating with stable outlook.

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