S&P rates Alert 360 CCC+

S&P said it assigned a CCC+ issuer rating to Central Security Group Inc. (Alert 360 Home Security), a B rating to its $25 million super-priority revolving credit facility due 2025 and a CCC+ rating to the new $200 million take-back term loan due 2025. Alert 360 Opco Inc. is the borrower under the new facility.

Alert 360 completed its debt restructuring and cut its debt by $246 million. “Although the restructuring improves the company’s financial flexibility and liquidity, we view the capital structure as unsustainable given our expectation for free cash flow deficits to persist into 2021 as the company makes large investments in customer acquisitions to increase its scale,” S&P said in a press release.

The outlook is negative. “The negative outlook reflects the risk that we could lower our rating if we expect cash flow deficits to continue beyond 2021 or if we become increasingly convinced the company will default within the next six to 12 months,” the agency said.

Fitch downgrades Nabors

Fitch Ratings said it downgraded the issuer default ratings for Nabors Industries, Ltd. and Nabors Industries, Inc. to C from B- following its announcement to exchange a series of senior unsecured notes for senior unsecured guaranteed notes.

“The downgrade results from Fitch viewing the transaction as a distressed debt exchange (DDE). Per Fitch’s criteria, the IDR will be downgraded to restricted default (RD) upon the completion of the DDE. The IDR will subsequently be re-rated to reflect the post-DDE credit profile,” the agency said in a press release.

Fitch also downgraded the affected senior unsecured notes to C/RR6 from CCC/RR6. Fitch affirmed the Nabors Industries Inc. unsecured priority guaranteed revolving credit facility at BB-/RR1. The B-/RR4 Nabors Industries Ltd. senior unsecured guaranteed notes are placed on ratings watch negative to reflect potential notching implications of the proposed guaranteed notes, the agency said.

Fitch removed the negative outlook.

S&P cuts Nabors Industries Ltd.

S&P said it cut Nabors Industries Ltd.’s issuer rating to SD from CCC+, the issue-level rating on its 0.75% exchangeable notes due 2024 to D and the ratings on the notes involved in the tender to CC.

The agency affirmed the CCC- issue-level rating on the company’s 4 5/8% notes maturing in 2021 because the early tender is at par, the company has liquidity under its credit facility to fund the maturity and the new notes would rank higher in the capital structure and receive a higher coupon.

“The downgrade follows Nabors’ completion of a private exchange, whereby it exchanged $115 million of the principal amount of its 0.75% exchangeable bonds due 2024 for $50.485 million of new senior priority guaranteed notes due 2025. In our view, the higher interest rate and additional guarantees are insufficient compensation to offset the extended maturity and significant discount to par. Therefore, we consider the transaction to be a distressed exchange and tantamount to a default,” S&P said in a press release.

S&P cuts TortoiseEcofin

S&P said it downgraded TortoiseEcofin Parent Holdco LLC’s issuer rating to CCC+ from B and its senior secured term loan and secured revolver to CCC from B-. The recovery rating on the company’s debt remains 5, indicating an expectation for modest (mid-20% area) recovery.

“We have reassessed our view of TortoiseEcofin’s business risk profile in light of a sizeable decline in assets under management (AUM), weak energy performance and low energy prices,” S&P said in a press release.

The outlook is stable.

Moody’s trims Tullow Oil

Moody’s Investors Service said it downgraded Tullow Oil plc’s corporate family rating to Caa1 from B3 and the probability of default rating to Caa1-PD from B3-PD. Moody’s also confirmed the Caa2 ratings assigned to Tullow Oil’s senior unsecured notes due in 2022 and in 2025. Moody’s changed the outlook to negative from ratings under review.

These actions conclude the review for downgrade started on March 25, Moody’s said.

The rating action reflects the expectation a more prolonged downturn and slower recovery of the oil prices in the next 12-18 months, compared to previous expectations, will hurt Tullow Oil, given the high FCF break-even point of Tullow Oil at about$40/bbl, Moody’s said.

“With no or limited sustained recovery in the pricing environment in the next 12-18 months, Moody’s does not believe that Tullow Oil’s capital structure will be sustainable in the medium term and it remains doubtful that the company will have the resources to repay the $650 million senior unsecured notes maturing in 2022, in the absence of additional disposals (which may weaken the profitability and/or the growth prospects of the company further) or capital injections from shareholders,” the agency said in a press release.

S&P cuts Vantage Specialty

S&P said it lowered Vantage Specialty Chemicals Inc.’s issuer rating to CCC+ from B-, its senior secured first-lien revolver and term loan to CCC+ from B- and second-lien term loan to CCC- from CCC.

The agency said it forecasts 2020 EBITDA and credit metrics will remain weaker than 2019 levels because of softness in its high-end personal care and industrial segments.

“Although we believe the company has adequately managed its expenses thus far in 2020, its S&P Global Ratings’ weighted-average debt to EBITDA will be above 9x, which we view as unsustainable,” S&P said in a press release.

The outlook is negative.

S&P puts IRB on positive watch

S&P said it placed all its ratings on IRB Holding Corp. (Inspire Brands), including its B issuer credit rating, on CreditWatch with positive implications. The placement follows Inspire reporting its plan to acquire Dunkin’ Brands.

“We expect the company to fund the transaction with a combination of cash, newly issued debt, and equity investment from its sponsor. We anticipate Inspire will maintain a highly leveraged capital structure following the transaction, which will include assuming Dunkin’s existing $2.4 billion of debt. As such, we believe that benefits from increased scale and improved diversification could possibly be offset by a very high level of leverage pro forma for the transaction,” S&P said in a press release.

The agency said it aims to resolve the CreditWatch after reviewing the pro forma business and capital structure when the deal’s details become available.

Moody’s revises Hillman view to stable

Moody’s Investors Service said it revised the outlook to stable from negative and affirmed the Hillman Group Inc.’s ratings, including the company’s corporate family rating at B3, probability of default rating at B3-PD, first-lien term loan rating at B2 and senior unsecured notes at Caa2. Simultaneously, the agency changed the speculative grade liquidity to SGL-2 from SGL-3.

“Today ratings and outlook actions reflect Hillman’s strong operating performance year-to-date, resulting in a meaningful improvement in financial leverage and free cash flow generation,” said Oliver Alcantara, Moody’s lead analyst for the company, in a press release.

“The company’s revenue and earnings will remain stable next year following a strong fiscal 2020, benefiting from continued good consumer demand for the company’s products and from sequential recovery in its consumer connected solutions business, which will support credit metrics remaining at around current levels,” added Alcantara.

S&P rates Dave & Buster’s, notes B-

S&P said it assigned B- ratings to Dave & Buster’s Inc. and its $550 million of senior secured notes.

“We anticipate slowly improving sales as venues reopen to limited demand. However, additional temporary closures caused by the regional resurgence of the coronavirus could lead to further operating volatility. We expect hindered profitability over at least the next 12 months due to deleveraging of lower sales on fixed costs,” S&P said in a press release.

The agency said it sees S&P Global Ratings-adjusted debt to EBITDA in fiscal 2021 (ending Jan. 30, 2022) exceeding 7x, compared with 4.7x in fiscal 2019.

Proceeds will be used to refinance the company’s term loan and repay most of its revolver borrowings.

The outlook is negative.

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