Fitch cuts Plains All American, debt to BBB-

Fitch Ratings said it downgraded Plains All American Pipeline, LP's (PAA) long-term issuer default rating and senior unsecured rating to BBB- from BBB, and short-term issuer default rating and commercial paper ratings to F3 from F2.

The outlook remains negative.

Fitch said the downgrades reflect its expectation that Plains All American’s leverage will not improve to 4.5 times or below on a sustained basis (at least through 2019), given the weakness in its supply and logistics business.

The agency now expects leverage (debt/adjusted EBITDA – inclusive of 50% equity credit for $1.5 billion+ of preferred equity) sustainably over 4.5 times through 2018, in Fitch's base case scenario.

“The increase in leverage, versus prior expectations is being driven by an underperformance in PAA's Supply and Logistics segment which management has guided to a $100 million-$300 million EBITDA contribution for 2018, below Fitch's prior expectations,” the agency said in a news release.

“PAA has faced a much more challenging and competitive environment for its supply and logistics business than previously anticipated, by management or by Fitch.

“With the underperformance at supply and logistics expected for the foreseeable future Fitch now expects leverage in the 4.5x to 5.0x range for 2018 and at roughly 4.5x in 2019 above prior expectations and negative ratings sensitivities based on Fitch's assumptions and base case projections.”

S&P lifts Physicians Realty to BBB-

S&P said it raised the corporate credit rating on Physicians Realty Trust and its operating partnership, Physicians Realty LP to BBB- from BB+.

The outlook is stable.

The agency affirmed the BBB- issue-level rating on the company's $400 million senior unsecured notes and withdrew the 2 recovery rating.

S&P said the upgrade acknowledges its view that Physicians Realty has continued to achieve rapid growth in a leverage-neutral manner, boosting scale, tenant diversification and quality and improving key credit protection measures.

Physicians Realty is close in size to healthcare REIT peers that focus almost exclusively on medical office buildings (MOBs) in terms of gross real estate assets, with about the same amount of assets as key peer Healthcare Realty Trust (BBB/stable/--), the agency explained.

Moody's lowers Old National view to negative

Moody's Investors Service said it affirmed the ratings of Old National Bancorp and its bank subsidiary, Old National Bank, and changed the outlook to negative from stable.

Old National Bancorp has long-term issuer and senior unsecured ratings of A3, Moody's said.

Old National Bank also has long- and short-term bank deposit ratings of Aa3 and prime-1 and a standalone baseline credit assessment of A2, the agency said.

Its issuer rating is A3 and its counterparty risk assessments are A1(cr)/prime-1(cr), Moody's said.

The actions follow news that Old National intends to acquire Anchor Bancorp, Inc. in a stock- and cash-transaction expected to close in the first quarter of 2018, the agency said.

The ratings reflect Old National's strong asset quality, which reflects the company's prudent underwriting and its sustainable market position in Indiana, Moody's said.

This supports its solid core deposit base and earnings generation, the agency added.

The negative outlook considers Old National's second significant out-of-market acquisition within the past two years, which increases both credit and operational risks, Moody's explained.

The acquisition may put pressure on the company's capital and liquid resources, although it will also add low-cost core deposits and geographic diversification to Old National's earnings base, the agency said.

S&P: CI Financial view to negative

S&P said it revised the outlook on CI Financial Corp. to negative from stable and affirmed its A- issuer credit and senior unsecured debt ratings.

S&P said the outlook revision reflects its view that CI will operate with leverage closer to 1.5 times in the next 18 to 24 months, as opposed to the previous expectation of about 1 time.

Moody’s changes Duke Energy Ohio to positive

Moody's Investors Service said it revised the outlook for Duke Energy Ohio, Inc. (Baa1) to positive from stable and affirmed its existing ratings. The ratings of Duke Ohio's utility subsidiary, Duke Energy Kentucky, Inc. (Baa1 stable) were also affirmed. The outlook for Duke Kentucky remains stable. Duke Ohio is a subsidiary of Duke Energy Corp. (Baa1 stable).

The agency said the positive outlook reflects an expectation of continued strong cash flow metrics, for example a ratio of cash flow from operations excluding changes in working capital (CFO pre-WC) to debt in the range of 20%.

“Our view also considers Duke Ohio's ownership of the smaller, vertically integrated, and neighboring, electric and gas operations of Duke Kentucky,” Moody’s said in a news release.

The agency expects Duke Ohio's financial metrics to remain at levels that are strong for a high Baa-rated transmission and distribution utility.

“Going forward, we anticipate the ratio of CFO pre-WC to debt will remain in the high teens to 20% range. These metrics include the results of subsidiary Duke Kentucky, which are consolidated into the financial statements of Duke Ohio,” Moody’s added in the release.

The agency said the positive outlook for Duke Ohio's ratings reflects its view of a credit supportive regulatory environment and an expectation that the utility will continue to demonstrate strong financial metrics.

Moody’s changes UBM outlook to stable

Moody's Investors Service said it affirmed UBM plc's Baa3 issuer rating as well as the Baa3 rating on the company's $350 million senior unsecured notes due 2020.

The outlook was changed to stable from negative.

“The change in UBM's outlook to stable from negative reflects our expectation that the company will sustain its good operating performance, successfully integrate AllWorld, and improve credit metrics such that it will return to operating below a Moody's adjusted leverage of 2.75x by the end of 2017,” Christian Azzi, a Moody's assistant vice president, analyst and lead analyst for UBM, said in a news release.

Moody’s assigns Baa1 to Priceline notes

Moody's Investors Service said it assigned a Baa1 senior unsecured rating to Priceline Group Inc.'s proposed notes offering and a prospective Baa1 rating to the senior unsecured portion of its new shelf registration.

The outlook is stable.

Net proceeds are expected to be used for general corporate purposes, including debt repayment, share repurchases and acquisitions.

With the latest debt issuance, Priceline's adjusted debt to EBITDA will slightly exceed 2x on a trailing basis. Moody's said it expects Priceline to manage its long-term leverage target at about 2x, which will be supported by high annual profit growth of at least low-teens percentage in constant currency over the next two years.

The agency said it believes Priceline will remain committed to its disciplined financial policies and excellent liquidity with annual free cash flow projected at over $4 billion and cash and investments of $16.6 billion (of which $14.7 billion is held by international subsidiaries) as of June 30.

“Priceline's Baa1 rating is supported by the company's leading position in the growing online travel accommodations market, high profitability, and sizable free cash flow,” Moody’s said in a news release.

The stable outlook reflects Moody's expectation of at least low-teens constant currency revenue growth over the next year as Priceline continues to expand internationally. The agency said it also expects operating margins to remain in the mid 30% range.

S&P assigns BBB+ to Priceline notes

S&P said it assigned a BBB+ issue-level rating to Priceline Group Inc.'s proposed dollar-denominated senior unsecured notes.

The company will use the proceeds for general corporate purposes, including share repurchases and debt repayment.

The issue-level rating is at the same level as Priceline’s corporate credit rating.

Pro forma for the debt offering, S&P said it expects Priceline to maintain a net cash position with no debt leverage. It also expects that the company will keep significant cash balances and strong discretionary cash flow generation.

These strengths are partially offset by potential travel disruption-related volatility, the agency added.

S&P rates O’Reilly Automotive notes BBB+

S&P said it assigned a BBB+ issue-level rating to O’Reilly Automotive Inc.'s proposed senior unsecured notes due 2027.

The company plans to use the net proceeds mainly to repay revolver borrowings and for working capital and share repurchases.

The agency estimates adjusted leverage will increase to about 2.7 times on a pro forma basis as of June 30, 2017, which is on the high side of expectations, but still consistent with the ratings.

S&P said the company previously used revolver borrowings to repurchase shares and increased its debt leverage closer to its targeted 2 times to 2.25 times range.

O’Reilly’s BBB+ corporate credit rating and stable outlook are unchanged.

Moody’s rates Procter & Gamble notes Aa3

Moody's Investors Service said it assigned an Aa3 rating to $2 billion of senior unsecured notes offered by Procter & Gamble Co.

The proceeds will be used for general corporate purposes and to refinance upcoming maturities of existing debt.

The outlook is stable.

Moody’s said Procter & Gamble's Aa3 senior unsecured and Prime-1 commercial paper ratings reflect the company's significant cash flow and financial flexibility. The company also benefits from a large portfolio of well-known branded consumer products with leading market shares.

“Cost savings programs should further enhance investment capacity and increase its solid operating margin. Credit metrics are somewhat weak for the rating, but are mitigated by the company's strong operating profile and competitive position,” the agency said in a news release.

The stable outlook reflects Moody's expectation that the company will continue to generate meaningful free cash flow, and manage shareholder distributions to maintain a conservative financial profile.

Moody’s rates Thermo Fisher bond Baa2

Moody's Investors Service said it assigned a Baa2 rating to the offering of senior unsecured bonds issued by Thermo Fisher Scientific Inc.

There is no change to the Prime-2 rating on the European commercial paper program, which was increased by €500 million to €1.5 billion. The co-issuers for the European commercial program are Thermo Fisher Scientific (Finance I) BV and Thermo Fisher Scientific (IVGN) BV.

The outlook is stable.

“The Baa2 rating is supported by Thermo Fisher's significant scale and leading market position in the life science industry. The rating also reflects the stability of the company's revenue and cash flow,” the agency said in a news release.

Moody’s said the rating is constrained by Thermo Fisher's aggressive stance toward acquisitions, share repurchases and dividends. The agency expects that Thermo Fisher will continue these activities going forward. That said, if Thermo Fisher meaningfully increases leverage following a large transaction, Moody's believes that the company would use its ample free cash flow to rapidly repay debt.

The combined roughly $3.26 billion commercial paper programs (at current exchange rates) exceed Thermo Fisher's $2.5 billion revolver commitment. However, the programs are designed to provide funding flexibility and the company commits to managing total borrowings within the credit facility commitment and specific borrowings within the same-day availability capacity of the revolver.

The agency said the stable outlook reflects its view that Thermo Fisher's credit metrics will continue to improve largely through earnings growth.

Fitch rates Thermo Fisher notes BBB

Fitch Ratings said it assigned a BBB rating to Thermo Fisher Scientific Inc.'s 10-year and 30-year dollar-denominated senior notes offering.

Proceeds will be used to partly finance the $7.2 billion acquisition of Patheon NV.

The outlook is stable.

Thermo Fisher plans to finance the acquisition with $1.5 billion of equity and approximately $5.5 billion of unsecured notes and short-term debt. Free cash flow (FCF) generation will help to reduce near-term debt maturities through 2018. The company anticipates suspending share repurchases until debt reduction results in gross leverage of 3 times.

Fitch said it calculates pro forma gross leverage of around 4.3 times following the acquisitions of Patheon. The acquisition follows close on the heels of the acquisition of FEI Company in 4Q16 for $4.2 billion; however, the agency expects gross leverage to return to roughly 3 times by the end of 2018, a level that is consistent with the BBB rating.

S&P gives BBB to Thermo Fisher notes

S&P said it assigned a BBB issue-level rating to Thermo Fisher Scientific Inc.'s proposed benchmark offering of dollar-denominated senior unsecured notes.

The company will use the proceeds to partially fund the Patheon NV acquisition.

S&P said the BBB corporate credit rating continues to reflect its expectation that Thermo Fisher's leverage will return to the mid-3 times range in 2018, despite a temporary spike above 4 times following the Patheon acquisition. The agency also projects Thermo Fisher will generate between $3 billion and $3.5 billion in annual free operating cash flow over the next two years.

Fitch: Intact Financial preferreds BBB

Fitch Ratings said it assigned Intact Financial Corp.’s C$150 million series 6 5.3% non-cumulative preferred shares a BBB rating.

No actions were taken on Intact's existing ratings.

The rating for the preferred shares is equivalent to the rating on Intact’s existing preferred shares. Under Fitch's hybrid methodology, the company’s non-cumulative preferred shares receive 100% equity credit. Gross proceeds will be C$200 million if the underwriters option is fully exercised.

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