S&P downgrades Magnum Hunter

Standard & Poor’s said it lowered the corporate credit rating on Magnum Hunter Resources Corp. to D from CCC-.

The agency also said it lowered the rating on the company’s second-lien term loan to D from CCC and issue-level rating on its senior unsecured debt to D from C.

The recovery rating on the second-lien debt remains at 2, reflecting 70% to 90% expected default recovery.

The recovery rating on the senior notes remains at 6, reflecting 0 to 10% expected default recovery.

The downgrades follow news that Magnum Hunter filed voluntary petitions for restructuring under Ch. 11 of the U.S. Bankruptcy Code, S&P said.

Magnum Hunter also announced its entry into a restructuring support agreement with lenders that hold, in the aggregate, about 75% of the company’s debt, the agency said.

The restructuring support agreement provides for debtor-in-possession financing in the form of a $200 million senior secured term loan that will be backstopped by lenders who are parties to the agreement, S&P said.

The restructuring agreement contemplates the debt-to-equity conversion of substantially all of the company’s debt upon emergence from the bankruptcy process, the agency added.

Moody’s drops Magnum Hunter, loan, notes

Moody's Investors Service said it downgraded Magnum Hunter Resources Corp.’s probability of default rating to D-PD from Caa3-PD, corporate family rating to Ca from Caa3, senior secured second-lien term loan rating to Ca from B3 and senior unsecured note rating to C from Ca.

The negative outlook and the SGL-4 speculative grade rating were maintained.

These actions were prompted by a Dec. 15 announcement that Magnum Hunter and certain of its wholly owned subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the state of Delaware.

Moody’s drops PTC to Caa2, loan to Caa3

Moody's Investors Service said it downgraded PTC Group Holdings Corp.'s corporate family rating to Caa2 from B3, probability of default rating to Caa2-PD from B3-PD and senior secured term loan rating to Caa3 from Caa1.

The outlook is negative.

The downgrades reflect PTC's deteriorating credit metrics, weak liquidity profile and the need to address debt maturities due within the next year, the agency said.

Moody’s drops Ultrapetrol CFR, notes to Caa3

Moody's Investors Service said it downgraded Ultrapetrol (Bahamas) Ltd.'s corporate family rating and $225 million 8 7/8% notes due 2021 to Caa3 from Caa1.

The liquidity rating was affirmed at SGL-4, reflecting a continued weak liquidity profile given near-term debt maturities in 2016.

The outlook remains negative.

Moody’s said the downgrades are due to the company's announcement that it decided to not make its $10 million notes interest payment due Dec. 15, as well as the interest and principal payments on its other loan facilities as the company continues negotiations with noteholders and bank lenders.

Ultrapetrol has a 30-day grace period under its notes indentures to make the missed interest payment before it triggers an event of default. If the notes payment is not made within the 30-day cure period and/or the interest and principal payments on the company's other loan facilities are not made within their applicable grace periods, Moody's said it will likely consider these events a default or limited default.

S&P lowers Ascent Resources – Marcellus

Standard & Poor's said it lowered the corporate credit rating on Ascent Resources – Marcellus LLC to CCC from CCC+.

The agency also said it lowered the rating on the company's first-lien debt to CCC from CCC+. The recovery rating on this debt is a 4, reflecting 30% to 50% expected default recovery.

S&P also said it lowered the rating on the company's second-lien debt to CC from CCC- with a recovery rating of 6, reflecting 0 to 10% expected default recovery.

The outlook is negative.

The downgrades reflect the company's deteriorating liquidity as weak natural gas prices and wide price differentials in the Appalachian region continue to depress operating cash flows, the agency said.

The ratings also consider the company's vulnerable business risk profile, highly leveraged financial risk profile and weak liquidity, S&P said.

DBRS lowers Andarko, Kerr-McGee views to negative

DBRS said it confirmed Anadarko Petroleum Corp.’s issuer rating at BBB, along with the senior unsecured notes and debentures ratings of Anadarko and Kerr-McGee Corp. at BBB.

DBRS also said it changed the trends to negative from stable.

Because of the sharp and steep decline in oil and gas prices, Anadarko’s key credit metrics for the last 12 months ending Sept. 30 have weakened considerably and are now less than the BBB threshold, the agency said.

DBRS added that the company has the flexibility to respond to pricing pressures and has sharply curtailed capital spending and sold assets.

Furthermore, the company has sufficient liquidity and a low-cost production base sourced from a diverse portfolio of producing assets mainly from key basins in the United States to withstand a period of weak pricing, the agency said.

S&P lowers BMC Software view to negative

Standard & Poor's said it revised the outlook on BMC Software Inc. to negative from stable.

The agency also said it affirmed the company’s B corporate credit rating.

The outlook revision reflects continued deterioration in BMC's credit metrics and free cash-flow generation subsequent to the company’s leveraged buyout in 2013, S&P said.

Although S&P said it does expect improvements in the company's product-bookings trends and stronger renewal opportunities in fiscal 2017 to improve its credit metrics and cash flow, there is considerable uncertainty as to whether these boosts will be sufficient to meaningfully reduce leverage.

S&P downgrades Abengoa

Standard & Poor’s said it lowered the long-term corporate credit rating on Abengoa SA to SD (selective default) from CCC-, along with its short-term corporate credit rating to SD from C.

The agency also said it affirmed the rating on the senior unsecured notes issued by Abengoa, Abengoa Finance SAU and Abengoa Greenfield SA at CCC-. The recovery rating on these notes was unchanged at 4, indicating 30% to 50% expected default recovery.

The downgrades reflect Abengoa’s failure to pay scheduled maturities under its €750 million euro commercial-paper program.

On Dec. 10, Abengoa said it is undergoing a debt-restructuring process that caused it to temporarily suspend certain financial commitments, S&P said.

Abengoa confirmed that none of the above-mentioned unpaid amounts are larger than the group’s cross-default materiality threshold of €30 million, the agency said.

S&P said it believes the group has not defaulted on any coupon due under its rated senior unsecured notes.

Moody’s cuts Dex Media CFR to Ca, notes to C

Moody's Investors Service said it downgraded Dex Media, Inc.'s probability of default rating to Ca-PD/LD from Caa3-PD and corporate family rating to Ca from Caa3.

The limited default "LD" designation appended to Dex's probability of default rating reflects the agency’s view that the company has defaulted under Moody's definition. The limited default designation will remain for three business days to reflect the view that a default has occurred.

Concurrently, Moody’s lowered the senior subordinated notes to C from Ca.

The senior secured credit facilities of Dex Media East, Inc., Dex Media West, Inc., R.H. Donnelley Inc. and SuperMedia Inc. remain unchanged at Caa3.

The outlook remains negative.

The downgrade reflects Dex's missed Sept. 30 interest payment on its senior subordinated notes and the subsequent failure to make the payment during the grace period. Moody's views this as a limited default as it represents a default of only one element of the company's capital structure.

Should the company default on other elements of its debt capital, execute a distressed exchange or pursue a formal reorganization under the U.S. Bankruptcy Code, ratings could be downgraded further, the agency said. Additionally, ratings could be downgraded further if Moody's comes to expect the recovery values on Dex's debt instruments to be lower than currently estimated.

S&P lifts Qualcomm to stable

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

The agency also said it affirmed the company’s A+ and A-1+ corporate credit ratings.

The outlook revision reflects the company’s decision to conclude its strategic review without a business separation or adoption of a more aggressive financial policy, S&P said.

The ratings reflect the company’s strong earnings scale due to its combined technology licensing and semiconductor product businesses, the agency said.

The ratings also consider its competitive position as one of the leading providers in wireless communications semiconductor markets, S&P said, and its minimal financial leverage.

These factors are partially offset by the company’s client-concentration relative to companies rated with an AA- rating, including Oracle Corp., the agency said.

S&P lifts Marriott Vacations

Standard & Poor’s said it raised the corporate credit rating on Marriott Vacations Worldwide Corp. to BB+ from BB.

The outlook is stable.

The upgrade reflects an improvement in the company’s financial risk following the implementation of a new captive finance criteria, which incorporates adjustments to segregate captive finance operations from consolidated performance at Marriott, S&P said.

The improved financial risk assessment reflects modest adjusted leverage at the parent, moderate historical and anticipated losses between 3% and 5% inside the captive’s loan portfolio, the agency said.

S&P affirms Treehouse, loans on positive watch

Standard & Poor's said it affirmed the BB corporate credit rating on Treehouse Foods Inc. and removed the rating from CreditWatch with negative implications.

The agency also said it affirmed the BB rating on the company’s existing $400 million 4 7/8% senior unsecured notes due 2022 and removed the rating from CreditWatch with negative implications.

The 3 recovery rating, which indicates 50% to 70% expected default recovery, is unchanged.

S&P also said it revised the CreditWatch listing to positive from negative on the BB rating on the company’s existing $900 million revolver due 2019, $200 million term loan A-1 due 2019 and $300 million term loan A due 2021.

The outlook is stable.

TreeHouse recently announced that it entered into an agreement to acquire the ConAgra Foods Inc. for $2.7 billion, the agency said.

The company expects to close the transaction during the first quarter of 2016, funding it with a secured $1.025 billion incremental term loan A, $775 million of senior unsecured notes and $1 billion in new equity.

The positive watch reflects an expectation that the debt will become secured obligations when the transaction is launched and have an improved recovery position ahead of the unsecured notes, S&P said.

The 3 recovery rating on the debt is unaffected. The agency said it will review these issue-level ratings after the company’s launch of its new proposed debt.

The acquisition is expected to improve TreeHouse's competitive advantage with increased scale, S&P said.

But there is near-term integration risk, given the size of the transaction and based on an estimated leverage of about 4.5x, which is above previous expectations, the agency said.

Moody’s revises Alison view to stable

Moody's Investors Service said it changed the outlook on all the ratings of Alison Midco Sarl to stable from positive.

Concurrently, the agency affirmed: (a) The B3 corporate family rating and B3-PD probability of default rating assigned to Alison Midco and the holding company for the operating subsidiaries; (b) the B2 ratings assigned to the first-lien senior secured term loan and the senior secured revolving credit facility of Arvos BidCo Sarl; and (c) the Caa2 ratings assigned to the second-lien senior secured term loan of Arvos Inc.

The outlooks of Arvos BidCo and Arvos Inc. were changed to stable from positive.

"The change in outlook reflects the increasingly tough environment for coal-fired power generation because of lower commodity prices and the implementation of stringent environmental legislation," Scott Phillips, Moody's vice president, senior analyst and lead analyst for Arvos, said in a news release.

"As a manufacturer of products for the utility and oil & gas industries, Arvos is somewhat sensitive to the demand from companies operating within these segments."

Moody’s could lower U.S. E&P companies

Moody's Investors Service said it placed the ratings of several U.S. exploration and production (E&P) companies and their rated subsidiaries on review for downgrade.

The companies include: Anadarko Finance Co.; Anadarko Petroleum Corp.; Antero Resources Corp.; Apache Corp.; Apache Finance Canada Corp.; Apache Finance Canada II Corp.; Denbury Resources Inc.; EP Energy LLC; EQT Corp.; Hess Corp.; Hilcorp Energy I, LP; Hunt Oil Co.; Kerr-McGee Corp.; National Fuel Gas Co.; Occidental Petroleum Corp.; Pioneer Natural Resources Co.; SM Energy Co.; Union Pacific Resources Group Inc.; Unit Corp.; WPX Energy, Inc.; Burlington Resources Finance Co.; Burlington Resources, Inc.; Cimarex Energy Co.; Concho Resources Inc.; Conoco Funding Co.; ConocoPhillips; ConocoPhillips Canada Funding Co. I; ConocoPhillips Canada Funding Co. II; ConocoPhillips Canada Resources Ltd.; ConocoPhillips Co.; ConocoPhillips Qatar Funding Ltd.; Continental Resources, Inc.; Energen Corp.; EOG Resources, Inc.; Kodiak Oil & Gas Corp.; Louisiana Land & Exploration Co.; Marathon Oil Corp.; Murphy Oil Corp.; Newfield Exploration Co.; Noble Energy, Inc.; Polar Tankers, Inc.; QEP Resources, Inc.; Range Resources Corp.; Southwestern Energy Co.; Tosco Corp.; and Whiting Petroleum Corp.

"Industry conditions have weakened further with oil and natural gas prices at multi-year lows," Moody's senior vice president Pete Speer said in a news release.

"E&P companies will be stressed for a longer period with much lower cash flows, difficulty selling assets and limited capital markets access."

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