S&P lowers Ashton Woods view to stable

Standard & Poor’s said it revised the outlook on Ashton Woods USA LLC to stable from positive.

The agency also said it affirmed the company’s B- corporate credit rating, along with its B- rating on its senior unsecured notes.

The recovery rating on the notes is unchanged at 3, indicating 50% to 70% expected default recovery.

The outlook revision reflects the slower pace of leverage improvement versus prior expectations for the company, S&P said.

The company’s leverage is expected to exceed 5x through fiscal year 2016, the agency said.

The ratings also consider the company’s weak business risk profile, its highly cyclical homebuilding industry and smaller size and lesser geographic diversity relative to peers, S&P said.

S&P lowers MEG Energy

Standard & Poor’s said it lowered the long-term corporate credit rating on MEG Energy Corp. to BB- from BB.

The agency also said it lowered the rating on the company’s senior secured debt to BB+ from BBB- with an unchanged 1 recovery rating, along with the rating on its senior unsecured debt to BB- from BB with an unchanged 3 recovery rating.

The 1 rating indicates 90% to 100% expected default recovery and the 3 rating indicates 50% to 70% expected default recovery.

The outlook is stable.

While the company has operating- and financial-flexibility to reduce its capital spending dramatically in response to the low crude oil prices, the downgrade reflects the persistent weakness of the company’s cash-flow adequacy, S&P said.

The ratings also reflect the company’s weak profitability metrics and highly leveraged financial risk profile, which has deteriorated due to falling crude oil prices despite the company’s ability to dramatically reduce capital spending to maintenance levels, the agency said.

But, the organic growth potential inherent in MEG’s large in-situ resource base offsets these weaknesses, S&P said.

S&P lifts Freescale Semiconductor view to positive

Standard & Poor’s said it revised the outlook on Freescale Semiconductor Inc. to positive from stable and affirmed its B corporate credit rating.

The agency also said it affirmed the B rating on the company’s senior secured debt. The 3 recovery rating on the debt is unchanged, indicating 50% to 70% expected default recovery.

S&P also said it affirmed the B- rating on the company’s senior unsecured debt. The 5 recovery rating on the debt is unchanged, indicating 10% to 30% expected default recovery.

The outlook revision reflects the improvement in Freescale’s revenue and profitability and its significant debt repayment over the past 12 months, which resulted in leverage declining to the low-5x range by the end of 2014, S&P said.

The company is expected to continue focusing on debt repayment in 2015, further reducing leverage to less than 5x, the agency said.

S&P lifts Express to stable

Standard & Poor’s said it revised the outlook on Express Inc. to stable from negative.

The agency also said it affirmed all of the ratings on Express, including its BB corporate credit rating.

The outlook revision reflects an expectation for improved credit metrics following the completion of the redemption for the company’s outstanding senior notes, S&P said.

The redemption is expected to be completed March 1 and the company’s leverage ratio is expected to improve to 2x the senior notes are retired, the agency said.

But, S&P added that it expects operating trends to improve only modestly in 2015, following weak operating trends in 2014.

The specialty apparel industry will remain difficult and highly promotional because of increased competition and consumer caution, the agency said.

Moody’s upgrades Berry Plastics

Moody's Investors Service said it upgraded the corporate family rating of Berry Plastics Group, Inc. to B1 from B2 and probability of default rating to B1-PD from B2-PD.

The agency also upgraded Berry’s first-lien senior secured term loans due 2020 and 2021 to Ba3/LGD3 from B1/LGD3 and second priority senior secured notes due 2021 and 2022 to B3/LGD 5 from Caa1/LGD 5.

The speculative grade liquidity rating was affirmed at SGL-2.

The outlook remains stable.

Moody’s said the upgrade of the corporate family rating reflects the proforma benefits from the recent restructuring and acquisitions.

The upgrade also reflects Berry's pledge to direct free cash flow to debt reduction and accretive acquisitions. While end markets are anticipated to remain sluggish and product price increases may further dampen demand, Berry's credit metrics are expected to improve further and remain within the B1 rating category over the horizon, the agency said.

Moody’s ups Brocade notes to Ba2

Moody's Investors Service said it upgraded Brocade Communications Systems Inc.'s $300 million senior unsecured notes to Ba2 from Ba3.

The upgrade was driven by the retirement of all of the company’s senior secured debt.

Brocade irrevocably called its senior secured notes and canceled its senior secured revolver after raising $575 million of senior unsecured convertible notes. As a result, the only debt to remain in the capital structure is senior unsecured and is thus rated the same as Brocade's Ba2 corporate family rating.

The debt instrument ratings are determined in conjunction with Moody's Loss Given Default Methodology.

S&P: BATS on negative watch

Standard & Poor’s said it placed the BB- rating on BATS Global Markets Inc. on CreditWatch with negative implications.

The agency also said it placed the BB- ratings on the company’s senior secured first-lien term loan and revolving credit facility on CreditWatch negative.

The CreditWatch action follows news that BATS is planning to acquire Hotspot FX, an institutional spot foreign-exchange platform from KCG Holdings, S&P said.

The purchase price is $365 million, financed by new debt issuance, the agency said.

This transaction will result in a spike in leverage to more than 4x, S&P said.

The acquisition will enable BATS to expand into a new asset class, increasing diversification, the agency added.

S&P puts CommScope on watch

Standard & Poor’s said it placed the BB- corporate credit ratings on CommScope Inc. and CommScope Holding Co. Inc. on CreditWatch with negative implications.

The agency also said it placed the ratings on the company’s senior secured term loans, unsecured notes and unsecured paid-in-kind toggle notes on CreditWatch negative.

The CreditWatch listing follows news that CommScope will acquire TE Connectivity for $3 billion, S&P said.

The transaction could result in leverage of more than 5x in 2015 depending on EBITDA levels, amount of debt used to fund the transaction and likely realization of potential cost saving opportunities, the agency said.

The transaction would roughly double the scale of the company, provide entry to certain wireline telecommunications markets and enhance its positions in the enterprise and wireless infrastructure markets, S&P added.

The ratings reflect CommScope’s tolerance for financial risk and its exposure to cyclical investment spending by wireless carriers, enterprise IT organizations and broadband providers, the agency said.

Moody’s rates Acadia loans Ba2, notes B3

Moody's Investors Service said it confirmed the ratings of Acadia Healthcare Co., Inc., including the B1 corporate family rating and B1-PD probability of default rating.

At the same time, the agency assigned a Ba2 (LGD 2) rating to the company's senior secured credit facilities and a B3 (LGD 5) rating to the proposed offering of senior unsecured notes.

The outlook is stable.

Proceeds will be used, along with additional equity, to fund the acquisition of CRC Health Group, Inc.

Moody’s rates Numericable-SFR CFR, notes, loans Ba3

Moody's Investors Service said it assigned a Ba3 corporate family rating and a Ba3-PD probability of default rating to Numericable-SFR SA (formerly Numericable Group SA).

The agency also assigned definitive Ba3 ratings to the company's rated senior secured notes and senior secured bank debt.

The outlook is stable.

Concurrently, Moody's withdrew the B1 corporate family rating and B2-PD probability of default rating of Ypso Holding Sarl.

The rating actions follow the completion of Numericable-SFR's acquisition of SFR SA, France's largest alternative communications provider, in late 2014 and the Jan. 23 conclusion of Moody's review of ratings for Altice SA, Numericable-SFR's controlling shareholder (60.3% ownership).

Moody’s said the Ba3 ratings acknowledge Numericable-SFR's strong industry position as the number 2 operator in the French telecommunications market and the solid industrial logic behind the combination of the company's pre-existing cable operations and the mobile and fixed line operations that came with the SFR acquisition.

Moody’s rates Viridian notes B2, loan Ba1

Moody's Investors Service said it assigned a provisional B2 (LGD4) rating to Viridian Group FundCo II Ltd.’s €600 million (roughly £468 million) of new senior secured notes due 2020 and a provisional Ba1 (LGD1) rating to Viridian Group Ltd.’s new £225 million super senior revolving credit facility.

Concurrently, the agency affirmed the B1 corporate family rating and B1-PD probability of default rating of the restricted group of companies owned by Viridian Group Investments Ltd. (VGIL).

The outlooks are stable.

This action follows Viridian’s announcement of its proposed refinancing.

Moody’s said the notes rating and affirmation of the corporate family rating takes into account that the reduction in cash interest from the lower coupon of the notes will result in an improvement in interest coverage ratio but also that the refinancing would result in an increase in financial leverage (measured by Net Debt to EBITDA) of the restricted group to circa 5 times from the current position of closer to 4 times.

S&P: Acadia loan BB-, notes B-

Standard & Poor’s said it affirmed the B+ corporate credit rating on Acadia Healthcare Co. Inc. and removed the rating from CreditWatch, where it was placed with negative implications in October.

The outlook is stable.

S&P also said it assigned a BB- rating to the new $500 million term loan B and lowered the ratings on the company’s existing credit facility to BB- from BB and removing the ratings from CreditWatch.

The agency also said it revised the recovery rating to 2 from 1, indicating 70% to 90% expected default recovery.

S&P also said it assigned a B- rating to the company’s new $300 million senior unsecured notes and lowered the ratings on the company’s existing notes to B- from B, removing the ratings from CreditWatch.

The agency also said it revised the recovery rating on the unsecured notes tranche to 6 from 5, indicating 0 to 10% expected default recovery.

Acadia is acquiring CRC Health Corp. for $1.2 billion in a partially debt-financed transaction, the agency said.

The ratings reflect a view that Acadia will be able to successfully integrate the acquisition and maintain its financial policy of operating with leverage between 4.5x and 5x over the medium term, S&P said.

The ratings also consider its exposure to government reimbursement, concentration in the behavioral health field and potential operating and integration challenges as the company continues to rapidly expand its business, the agency said.

Moody’s drops Ameriforge, loans

Moody's Investors Service said it downgraded Ameriforge Group, Inc.'s corporate family rating to B3 from B2 and probability of default rating to B3-PD from B2-PD.

Concurrently, the agency downgraded both the ratings for the company's senior secured revolving credit facility and senior secured first-lien term loan to B2 from B1 and the rating for the senior secured second-lien term loan to Caa2 from Caa1.

The outlook remains negative.

Moody’s said the downgrade reflects Ameriforge’s heavy concentration in the oil and gas sectors with approximately 70% of Ameriforge’s end markets directly related to the oil and gas segment.

The agency expects that Ameriforge’s credit quality will be adversely affected by a reduction in the rig counts for oil and gas caused by lower oil prices and insufficient demand. Moody’s anticipates leverage will exceed and be sustained meaningfully above 6 times for at least the next year.

Moody’s could cut CommScope

Moody's Investors Service said it placed CommScope Holding Co., Inc.'s B1 corporate family rating under review for downgrade after the company announced it is planning to purchase a portion of TE Connectivity's network solutions business unit for $3 billion with a combination of cash and up to $3 billion in debt.

The transaction is expected to close in the second half of 2015.

CommScope is planning to purchase certain telecom, enterprise and wireless businesses from TE Connectivity for about $3 billion, funded with a combination of cash on hand and new debt. The purchase price could be funded with up to $3 billion in debt, though Moody's expects CommScope to use a portion of its sizeable cash balances to fund the transaction.

Leverage could exceed 5 times at closing of the transaction, up from well under 4 times as of September 2014. The review will focus on the final capital structure and the expected operating and financial performance of the combined entities, Moody’s said.

S&P: Epic Health loans B, CCC+

Standard & Poor’s said it assigned a B corporate credit rating to Epic Health Services Inc.

The agency also said it assigned a B rating to the company’s $25 million revolving credit facility and $185 million first-lien term loan. The recovery rating on this debt is 3, indicating 50% to 70% expected default recovery.

S&P also said it assigned a CCC+ rating and 6 recovery rating to the company’s $45 million second-lien term loan, indicating 0 to 10% expected default recovery.

The outlook is stable.

The ratings reflect the company’s business position in the niche of pediatric home health care and debt-to-EBITDA leverage expected to remain between 4x and 5x, S&P said.

The ratings also consider the company’s weak business risk profile, narrow focus, vulnerability to Medicaid cuts and significant exposure to Medicaid reimbursement from a few states, the agency said, along with a small scale.

S&P revises Oshkosh notes recovery to 4

Standard & Poor’s said it revised the recovery rating on Oshkosh Corp.’s senior unsecured notes to 4 from 3, indicating 30% to 50% expected default recovery.

The BB+ issue-level rating on the company’s notes, as well as its BB+ corporate credit rating and stable outlook on are unchanged.

The revised recovery rating reflects an assessment that the announced increase in lender commitments under Oshkosh’s revolving credit facility to $850 million from $600 million results in lower recovery expectations for the company’s unsecured notes in a default scenario, S&P said.

The company is expected to utilize the upsized revolving credit facility to fund the call of $250 million senior unsecured notes due 2020 and for general corporate purposes, S&P said.

The ratings reflect the company’s fair business risk profile and intermediate financial risk profile, the agency said.

The ratings also consider its market-leading positions in most end markets, good scale and scope and a view that its profitability is volatile and relatively low for a company in the capital goods sector, despite recent improvement, S&P said.

Moody’s ups Open Text loan, rates loan Baa3

Moody's Investors Service said it upgraded Open Text Corp.'s $800 million senior secured term loan B to Baa3 from Ba1, assigned a Baa3 rating to the company's new $300 million senior secured revolving credit facility and revised the probability of default rating to Ba1-PD from Ba2-PD.

The Ba1 corporate family rating and all other ratings were affirmed.

The outlook remains negative.

Moody’s said the upgrade of the term loan and revision of the probability of default rating reflect the introduction of unsecured debt into Open Text's capital structure and reduction of outstanding secured debt following the closing of the company's December 2014 $800 million unsecured note offering and subsequent paydown of the $600 million ($492 million outstanding balance) secured term loan A. The debt instrument ratings are determined in conjunction with Moody's Loss Given Default Methodology.

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