Fitch cuts Lucid Energy, rates loan BB-

Fitch Ratings said it downgraded Lucid Energy Group II Borrower, LLC's long-term issuer default rating to B+ from BB- and senior secured term loan B rating to BB-/RR3 from BB+/RR1.

In addition, Fitch assigned a senior secured rating of BB-/RR3 to the proposed senior secured term loan B-2 facility.

The proposed senior secured term loan B-2 is expected to rank pari pasu to the existing $950 million senior secured term loan B.

The outlook was revised to negative from stable.

“The downgrades reflect higher expected near-term leverage in 2019 and 2020, driven by slower than previously anticipated volume growth from Lucid's acreage dedicated producers,” the agency said in a news release.

S&P rates Lucid Energy loan B

S&P said it assigned its B issue-level rating and 3 recovery rating to Lucid Energy Group II Borrower LLC's $100 million senior secured term loan B-2.

The B issue-level rating and 3 recovery rating on the senior secured term loan B-1 remain unchanged.

Lucid will use proceeds to fund general corporate purposes and capital expenditures.

“Despite the increase in total debt, the issue-level and issuer credit ratings remain B as we do not expect a material change in credit metrics,” S&P said in a news release.

Moody’s downgrades Allnex

Moody's Investors Service said it downgraded to B2 from B1 the corporate family rating and to B2-PD from B1-PD the probability of default rating of Allnex (Luxembourg) & Cy SCA.

The agency also downgraded Allnex Sarl's €730 million senior secured term loan B1, €212.5 million senior secured term loan B and its €160 million senior secured revolving credit facility ratings to B2 from B1.

Moody's also downgraded Allnex USA Inc.'s $224.35 million senior secured term loan B, $398.2 million senior secured term loan B2 and its $300 million senior secured term loan B3 ratings to B2 from B1.

The outlook was changed to stable from negative.

“The downgrade by one notch to B2 reflects the elevated leverage of debt/EBITDA of 6.0x per 2018 and the uncertain outlook in key end markets such as the automotive sector that accounts for 21% of revenue exposure and has shown weakness,” Moody’s said in a news release.

S&P trims Chaparral Energy

S&P said it lowered the issuer credit rating on Chaparral Energy Inc. to CCC+ from B-. The outlook is negative.

S&P also lowered the issue-level rating on Chaparral's unsecured notes to CCC.

The agency revised the recovery rating on this debt to 5 from 4, indicating an expectation for modest (10%-30%; rounded estimate: 15%) recovery to creditors in the event of a payment default.

“The downgrade primarily reflects our view of Chaparral's liquidity position, which stood at approximately $154 million at the end of the quarter due to leverage covenant constraints imposed by the company's credit agreement,” S&P said in a news release.

“Although we expect Chaparral will gradually be able to access more of its $325 million borrowing base due to higher production rates and EBITDA, we project that cash flow outspend will encumber a significant portion of the credit facility over the next 12 to 24 months.”

S&P lowers Evergreen Skills

S&P said it lowered its issuer credit rating on Evergreen Skills Lux Sarl (doing business as Skillsoft and SumTotal) and the issue-level ratings on the first-lien debt to CCC- from CCC+.

S&P also lowered the issue-level ratings on the second-lien term loan to C from CCC-.

The outlook is negative.

“The downgrade reflects our view that Evergreen Skills could pursue a restructuring or distressed debt exchange given its weak operational performance, significant liquidity constraints, and diminished cash sources over the next 12 months,” S&P said in a news release.

S&P lowers Healogics

S&P said it lowered its issuer credit rating on CDRH Parent Inc., which does business as Healogics Inc., to CCC+ from B-.

At the same time, S&P lowered the issue-level rating on the company's senior secured term debt to CCC+. S&P also revised the recovery rating to 4 from 3, indicating an expectation of average (30%-50%; rounded estimate: 45%) recovery in the event of a payment default.

The outlook is negative.

“The downgrade reflects our view that the company will struggle to significantly improve financial performance, eliminate cash flow deficits, and service its very high debt level, leading us to believe that current debt levels may be unsustainable ahead of Healogics' need to refinance its debt in 2021,” S&P said in a news release.

Fitch lowers Intralot

Fitch Ratings said it downgraded Intralot SA's long-term issuer default rating to CCC+ from B-, and removed it from rating watch negative where it was placed on March 7.

Fitch also downgraded the senior unsecured rating on the bonds issued by Intralot Capital Luxembourg SA, and guaranteed by Intralot's key subsidiaries, to CCC+/RR4/36% from B-/RR4/33%.

The senior unsecured rating remains on rating watch negative.

“The downgrade reflects heightened liquidity and refinancing risks, with continuing negative free cash flow (FCF), albeit partly driven by capex associated with new contracts, and leverage remaining at a level no longer compatible with a B- rating,” the agency said in a news release.

Moody’s cuts Novolex

Moody's Investors Service said it downgraded the corporate family rating of Flex Acquisition Co., Inc. (Novolex) to B3 from B2 and the probability of default rating to B3-PD from B2-PD.

The outlook is stable.

“Underperformance of the acquired Waddington business and legacy operations resulted in higher than expected leverage and will delay anticipated deleveraging by at least a year,” Anastasija Johnson, senior analyst at Moody's, said in a news release.

Additionally, the senior secured revolving credit facility was downgraded to B2 (LGD3) from B1 (LGD3), the senior secured term loan was downgraded to B2 (LGD3) from B1 (LGD3), and the senior unsecured bond rating was downgraded to Caa2 (LGD5) from Caa1 (LGD5).

Moody’s trims Picard

Moody's Investors Service said it downgraded Picard Bondco SA's corporate family rating to B3 from B2 and its probability of default rating to B2-PD from B1-PD.

Moody's also affirmed Picard's senior unsecured notes rating at Caa1 and downgraded Picard Groupe SAS' senior secured notes rating to B3 from B2.

The outlook remains stable.

“We expect Picard's earnings to erode somewhat over the next two years because of changing consumer behavior and fierce competition in France,” Vincent Gusdorf, Moody’s vice president, senior credit officer and lead analyst for Picard, said in a news release.

“As a result, Picard will be unable to reduce its leverage, which increased significantly over the last two years because of payments to shareholders.”

Moody’s lifts BioScrip, rates loan B2

Moody's Investors Service said it upgraded the corporate family rating of BioScrip, Inc. to B3 from Caa1 and upgraded the probability of default to B3-PD from Caa1-PD.

At the same time, Moody's upgraded the speculative grade liquidity rating to SGL-3 from SGL-4 and assigned a B2 (LGD 3) rating to the proposed $925 million first-lien term loan B.

The outlook is stable.

This concludes the review for upgrade that was initiated on March 18.

The agency said the upgrade reflects the improvement in BioScrip's credit profile due to the pending merger with HC Group Holdings III, Inc. (Option Care).

“BioScrip will benefit from the combined company's significantly larger scale, and increased diversity across payors, therapies and geographies,” the agency said in a news release.

S&P rates BioScrip loan B-

S&P said all of its ratings on BioScrip Inc., including the CCC+ issuer credit rating and issue level ratings, remain on CreditWatch with positive implications until the close of the merger with BioScrip competitor HC Group Holdings III Inc.

S&P also assigned a preliminary B- issue-level rating and 3 recovery rating to BioScrip's proposed $925 million first-lien term loan B.

“We expect to resolve the CreditWatch placement with a one-notch upgrade to B- and a stable outlook following the close of the merger, reflecting potentially significant synergies and a return to positive free cash flow over next two years,” S&P said in a news release.

Moody’s lifts Eastern Power loan

Moody's Investors Service said it upgraded Eastern Power, LLC's senior credit facility to Ba3 from B1, which incorporates a planned $150 million increase to the existing term loan B.

The outlook is stable.

After the incremental $150 million debt raise, the senior secured credit facility will consist of a $1.24 billion term loan B due 2023 and a $50 million revolver due 2021.

“The one notch rating upgrade to Ba3, which considers the increased debt quantum and the use of proceeds, reflects Eastern Power's improved financial position which we believe can be sustained owing to management's effective contracting strategy and a stronger NY Zone J capacity pricing environment,” the agency said in a news release.

Moody’s lifts Fiat Chrysler

Moody's Investors Service said it upgraded to Ba1 from Ba2 the corporate family rating and to Ba1-PD from Ba2-PD the probability of default rating of Fiat Chrysler Automobiles NV.

Also, the ratings on senior unsecured instruments issued by Fiat Chrysler Automobiles and Fiat Chrysler Finance Europe SA were upgraded to Ba2 from Ba3.

The outlook was changed to stable from positive.

“FCA's upgrade reflects the continued improvements in its credit metrics and Moody's expectation that FCA will be able to sustain these credit metrics even in a more challenging environment with softening demand in some of its key markets and additional costs to comply with upcoming emission requirements,” Falk Frey, a senior vice president and lead analyst at Moody’s, said in a news release.

S&P cuts Vornado Realty Trust; bonds unchanged

S&P said it downgraded its issuer credit rating on Vornado Realty Trust and its operating partnership, Vornado Realty LP (collectively, VNO), to BBB from BBB+.

At the same time, S&P affirmed the BBB issue-level ratings on the company's unsecured debt given the improved level of secured debt to total assets following the JV transaction.

“The downgrade on VNO's issuer credit rating reflects our view that its competitive position is somewhat weakened from the transfer of $5.6 billion of retail assets into an unconsolidated JV. The transfer results in reduced scale and asset diversity as well as slightly weaker operating margins,” S&P said in a news release.

“In addition, we had previously assumed that VNO would be selling assets to modestly reduce leverage in advance of rising development funding needs. But we now expect S&P Global Ratings' adjusted debt to EBITDA to remain relatively flat at around 8x for the next two years.”

S&P puts SnapAV on watch

S&P said it placed its B issuer credit rating and all issue-level ratings on Crackle Intermediate Corp. (dba SnapAV) on CreditWatch with negative implications, reflecting the risk of a downgrade due to potentially higher leverage.

The CreditWatch placement follows SnapAV's announcement of plans to acquire Control4 for $680 million.

“We will monitor developments related to the proposed transaction, including the proposed new debt's terms, repayment plans, financial policy, and required approvals, and plan to resolve the CreditWatch following the close of acquisition. We would not expect to downgrade Crackle by more than one notch,” S&P said in a news release.

S&P assigns B- to QMax notes

S&P said it assigned preliminary B- issuer credit ratings to Q'Max Solutions Inc. (guarantor) and QMax Financial Holdings Inc. (issuer).

S&P also assigned a preliminary B- issue level rating and preliminary 3 recovery rating to the company's proposed $225 million senior secured notes due 2024. The outlook is stable.

“The B- preliminary issuer credit rating on Q'Max reflects the company's small scale and scope of operations, limited product diversity, and exposure to the highly cyclical oilfield services sector,” S&P said in a news release.

“This is partly offset by the company's good geographic footprint, including exposure to large international oil companies that often provide a measure of stability compared to the highly volatile North American market, on-shore and off-shore capabilities, and a diversified customer base.”

Moody’s rates QMax notes Caa2

Moody’s Investors Service assigned ratings to QMax Financial Holdings Inc., including a Caa1 corporate family rating, a Caa1-PD probability of default rating and a Caa2 rating on its senior secured notes.

The outlook is stable.

Proceeds from the issuance of the notes along with equity contributed by its sponsor will be used to refinance QMax's existing debt capital structure, fund its upcoming U.S. acquisition upfront payment and purchase leased equipment.

Additionally, the company is entering into a new credit agreement to provide for a $150 million revolver.

“The financing will support QMax's growth plans and improve its liquidity,” James Wilkins, Moody's vice president, said in a news release.

The agency said the corporate family ratings reflects QMax's modest size, high leverage with debt to EBITDA of 7x (before acquisition pro forma adjustments or adjustments for some one-time items to EBITDA) at year-end 2018, and volatile nature of its cash flows.

Fitch rates Euroports loans B, BB

Fitch Ratings said it assigned EP BCo SA, the direct shareholder of Euroports Holdings Sarl, an expected long-term issuer default rating of BB- with a stable outlook.

In addition, Fitch assigned expected BB ratings with recovery rating RR2 to the €315 million first-lien term loan B and €25 million revolving credit facility, and a B expected rating with a recovery rating RR6 to the €105 million second-lien facility, issued by EP.

“The issuer default rating of Euroports reflects stable cash flows from its mature terminals concentrated in the commodity sector and our deleveraging expectations,” Fitch said in a news release.

“Its long-standing relationships with a diversified customer base to a degree mitigate limited visibility on future cash flows, especially from terminals currently under development.”

Moody’s rates Horizon Pharma loan Ba1

Moody's Investors Service said it assigned a Ba1 rating to the new senior secured term loan of Horizon Pharma USA, Inc., a subsidiary of Horizon Therapeutics plc.

There are no changes to Horizon's existing ratings, including the Ba3 corporate family rating, the Ba3-PD probability of default rating, the Ba1 senior secured rating, the B1 senior unsecured rating and the SGL-1 speculative grade liquidity rating.

The outlook remains stable.

Proceeds of the term loan are for the repayment of an existing term loan.

“The refinancing is credit-positive because it extends Horizon's maturity profile,” the agency said in a news release.

DBRS rates Kruger Packaging notes BB (high)

DBRS said it assigned a provisional issuer rating of BB (high) and a provisional senior unsecured notes rating of BB (high) with a recovery rating of RR3 to Kruger Packaging Holdings LP.

All trends are stable.

Kruger Packaging is expected to issue C$125 million of senior notes, the proceeds of which will be used to repay senior bank term debt and pay a distribution to unitholders that on a pro forma basis will slightly weaken leverage, DBRS said in a news release.

“The ratings benefit from KPH’s position in the less volatile paper packaging industry when compared to other forest product sub-sectors, its cost-effective mills and the unique properties of some of its products that give the company a competitive advantage,” DBRS said.

“However, the ratings are constrained by the company’s niche position and lack of diversification in the broader paper and forest products industry, its low (albeit increasing) forward integration into its corrugated box plants, its exposure to volatile input costs and the overall underlying volatility of the forest products industry.”

Moody’s rates MRO loan B2

Moody's Investors Service said it affirmed ratings for MRO Holdings, Inc. including the B2 corporate family rating and the B2-PD probability of default rating.

Concurrently, Moody's assigned a B2 rating to the company's proposed $360 million senior secured term loan.

Proceeds from the facility will be used to pay a $135 million dividend to shareholders as well as to refinance existing debt.

“The B2 rating balances MROH's small size and its limited operating history as a consolidated entity against a growing presence as a provider of airframe maintenance, repair and overhaul services (MRO),” the agency said in a news release.

S&P rates Peak Jersey first-lien debt B-

S&P said it assigned a preliminary B- rating to Peak Jersey Holdco Ltd. and its first-lien debt.

The outlook is stable.

Vista Equity Partners is acquiring the sports data activities of Perform Group (DAZN) and merging them with STATS to create Peak Jersey Holdco Ltd.

“We forecast that Peak Jersey will have high leverage, with our adjusted debt to EBITDA ratio at about 10x at year-end 2019 pro forma the transaction, reducing to 6.5x-7.0x by year-end 2020, with limited free operating cash flow (FOCF),” S&P said in a news release.

Fitch rates Rodenstock loans B

Fitch Ratings said it published European Optical Manufacturing Sarl's (Rodenstock) long-term issuer default rating at B- with a stable outlook.

Fitch also assigned an expected rating of B/RR3 to the seven-year €425 million senior secured term loan and the six and a half-year €20 million revolving credit facility, which will be issued as part of Rodenstock's proposed refinancing.

“The B- issuer default rating reflects Rodenstock's sustainable business model, which is due to an adequate approach to the market and distribution channels with the lenses division, allowing the company to maintain a prominent position in Germany and reach profitability levels in line with main competitors,” the agency said in a news release.

S&P rates Sirius Computer loans B, notes CCC+

S&P said it affirmed its B issuer credit rating on SCS Holdings I Inc. (Sirius Computer Solutions Inc.). The outlook is stable.

S&P also assigned a B issue-level rating and 3 recovery rating to Sirius' proposed first-lien senior secured credit facilities, consisting of $750 million term loan and $190 million revolver, and a CCC+ issue-level rating and 6 recovery rating to the proposed $300 million senior unsecured notes.

Clayton, Dubilier, & Rice, a private equity sponsor, is acquiring SCS Holdings I (the holding company of Sirius Computer Solutions), for approximately $1.5 billion, partially funding the transaction with $1.05 billion of debt.

“The affirmation primarily reflects our expectation that adjusted leverage, pro forma for the proposed LBO debt financing, will remain within our leverage threshold at the B rating. Following the transaction, we estimate that pro forma S&P Global Ratings-adjusted debt to EBITDA will increase to the high-6x area, up from the high-5x area for the 12 months ended Dec. 31, 2018,” S&P said in a news release.

Moody’s rates Southcross loans Ba2

Moody's Investors Service said it assigned a Ba2 rating to Southcross Energy Partners, LP's $127.5 million senior secured priming super-priority debtor-in-possession term loans comprised of a $72.5 million new-money term loan and a $55 million new-money letter of credit term loan.

On May 7, the U.S. Bankruptcy Court for the District of Delaware approved up to $255 million of aggregate DIP loans, but Moody's did not rate the subordinated $127.5 million term loan (roll-up loan) that will be used to refinance pre-petition term loans held by Southcross Energy's DIP lenders.

These DIP facilities were provided by some pre-petition first-lien lenders that will help the company manage operations and liquidity needs during the Chapter 11 reorganization process, and the DIP credit agreement has a maturity date of Oct. 1.

Southcross Energy and its affiliated entities had filed a voluntary petition for relief under Chapter 11 on April 1, and Moody's subsequently withdrew all ratings on the company.

The Ba2 rating primarily reflects the collateral package and collateral coverage available to the rated DIP facilities, which Moody's views to be modestly strong, the agency said.

S&P rates Transocean Sentry notes B+

S&P said it assigned its B+ issue-level rating and 1 recovery rating to the proposed $500 million of senior secured notes due 2023 that will be issued by Transocean Sentry Ltd., a Cayman Islands indirect subsidiary of offshore drilling contractor Transocean Ltd.

The 1 recovery rating on the notes indicates an expectation for very high recovery (90%-100%; rounded estimate: 95%) for creditors in a payment default.

S&P also affirmed its B+ issue-level rating on Transocean's existing secured debt (including its secured credit facility), the B issue-level rating on its unsecured debt with subsidiary guarantees, and the B- issue-level rating on its unsecured debt without guarantees, although S&P said it is revising the recovery rating on the unsecured debt to 3 from 4 based on a higher estimate of enterprise value.

All of the company’s other ratings remain unchanged.

Moody’s rates Transocean Sentry notes B1

Moody's Investors Service said it assigned a B1 rating to Transocean Sentry Ltd.'s proposed $500 million senior secured notes due 2023.

Concurrently, Moody's affirmed Transocean Inc.'s B3 corporate family rating, B3-PD probability of default rating, Caa1 rating on the priority guaranteed senior unsecured notes and Caa2 senior unsecured notes rating.

Moody's also affirmed the B1 rating on Transocean Guardian Ltd.'s 2024 notes, Transocean Pontus Ltd.'s 2025 notes and Transocean Poseidon Ltd.'s 2027 notes.

Moody's affirmed Transocean's SGL-1 speculative grade liquidity rating.

The outlook remains negative.

“There are modest signs of recovery in the offshore drilling sector, but the recovery is not sufficient yet for Transocean to reduce its debt burden and moderate its high financial leverage,” Sreedhar Kona, Moody's senior analyst, said in a news release.

“The company's high debt burden and still unclear path to an improvement in financial leverage is reflected in the negative outlook.”

Moody’s rates Emerson Electric notes A2

Moody's Investors Service said it assigned an A2 rating to Emerson Electric Co.'s new senior notes due 2024.

The issuance does not impact other ratings of Emerson, including the A2 senior unsecured or P-1 short-term ratings, Moody’s said.

The outlook is stable.

“Emerson's debt ratings reflect the company's sizeable and broadly diversified revenue base, and its leading market positions among its largest product offerings,” the agency said in a news release.

S&P rates Ryder System notes BBB+

S&P said it assigned its BBB+ issue-level rating to Ryder System Inc.'s proposed senior unsecured medium-term notes.

The company plans to use the proceeds from these notes to refinance its existing debt and for general corporate purposes.

“Our long-term BBB+ issuer credit rating on Ryder reflects the company's strong position as one of the two major participants in the full-service truck leasing market and the strong and stable cash flows this business generates,” S&P said in a news release.

S&P revises Traverse Midstream view to negative

S&P said it revised its outlook on Traverse Midstream Partners LLC to negative from stable and affirmed the B+ issuer credit rating on the company.

At the same time, S&P affirmed its B+ issue-level rating, with a recovery rating of 4, on Traverse's senior secured term loan B. The 4 recovery rating indicates an expectation for average recovery (30%-50%; rounded estimate: 45%) in the event of a payment default.

“The negative outlook reflects our forecast average debt to EBITDA ratio of about 8.4x in 2019 and 2020 along with our assessment of the company's liquidity as less than adequate,” S&P said in a news release.

S&P revises Focus Financial view to positive

S&P said it revised its outlook on Focus Financial Partners LLC to positive from stable.

At the same time, S&P affirmed its BB- issuer credit and secured debt ratings. The recovery rating on the debt issues remains 3, indicating an expectation for meaningful (50%) recovery in the event of a default.

“The positive outlook reflects our expectation that Focus' business will continue to strengthen and diversify while leverage continues to decline to close to or below 4x during the next 12 months as a result of higher cash flow generation, partially offset by further borrowing from the revolving credit facility to fund acquisitions,” S&P said in a news release.

S&P revises Jazz Acquisition view to positive

S&P said it revised its outlook on Jazz Acquisition Inc. to positive from stable and affirmed the ratings, including the B- issuer credit rating.

“The positive outlook reflects our belief that 2019 credit metrics will continue to improve, despite thinning EBITDA margins due to costs associated with expanding the business,” S&P said in a news release.

Moody’s changes Becton Dickinson view

Moody's Investors Service said it affirmed all of Becton, Dickinson & Co.'s ratings including the Ba1 corporate family rating, Ba1-PD probability of default rating, Not Prime commercial paper rating, SGL-1 speculative grade liquidity rating and the Ba1 senior unsecured rating.

The outlook was revised to positive from stable.

“The revision in the outlook to positive considers the deleveraging progress that BD has made since the closing of the Bard acquisition in December 2017,” Moody's senior vice president Scott Tuhy said in a news release.

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