Moody’s changes Quiksilver view to negative

Moody's Investors Service said it revised Quiksilver Inc.'s outlook to negative from stable.

The company's B3 corporate family rating and SGL-2 speculative grade liquidity rating were affirmed.

Moody’s said the outlook revision reflects the company's declining top-line performance with YTD revenues falling around 7% and this trend is expected to continued into the second half of fiscal 2014 (ends Oct. 31). As a result, Quiksilver expects adjusted EBITDA (as defined by the company) to be below the actual levels achieved in 2014; as a result, Moody's expects credit metrics will remain weak for an extended period of time.

Fitch ups Harbinger to positive

Fitch Ratings said it has affirmed the long-term issuer default rating of Harbinger Group, Inc. at B and revised the outlook to positive from stable.

Fitch said it has also upgraded the company's senior secured debt to BB-/RR2 from B/RR4.

The revised outlook follows the completion of several transactions recently executed by Harbinger, which have improved the company's credit profile, in Fitch's view. These transactions have resulted in a stronger capital structure and a more diversified ownership base for the company.

Moody’s changes Sports Authority to negative

Moody's Investors Service said it changed Sports Authority Inc.'s outlook to negative from stable and affirmed all ratings, including the B3 corporate family rating, B3-PD probability of default rating and the B3 rating on the company's secured term loan due 2017.

Moody’s said the outlook change to negative considers Sports Authority's inconsistent operating performance, led by a three-year negative same-store sales trend and the need for the company to address debt maturities well ahead of the obligations effectively becoming current in February 2015.

Weaker-than-expected operating performance in 2013 led to lease-adjusted debt/EBITDA increasing to about 7.0 times and EBITA/interest weakening to about 1.0 times, the agency said.

Moody’s rates Seadrill loan Ba3, notes Baa3

Moody's Investors Service said it affirmed Seadrill Partners LLC's (SDLP) corporate family rating at Ba3 and probability of default rating at Ba3-PD.

The agency also assigned a Ba3 definitive rating to the $1.8 billion senior secured term loan due 2021, borrowed by Seadrill Operating LP and Seadrill Partners Finco LLC, subsidiaries of SDLP, which the company is seeking to increase with a $1 billion add-on. It also assigned a Baa3 rating to the $100 million first out secured revolving credit facility due 2019, borrowed by Seadrill Operating LP, Seadrill Partners Finco LLC and Seadrill Capricorn Holdings LLC, also a subsidiary of SDLP.

The outlooks remain stable.

Moody’s said these actions follow the company's very weak operating performance in the first quarter 2014 and also the proposed $1 billion term loan to refinance existing debt facilities relating to the purchases of the West Capricorn and West Auriga vessels. The $1 billion term loan will be structured as an add-on to the existing $1.8 billion senior secured term loan due 2021.

S&P rates TGI Fridays loans BB-, B-

Standard & Poor’s said it assigned a B+ corporate credit rating to TGI Fridays Inc.

The outlook is negative.

At the same time, the agency assigned a BB- issue rating to the company’s proposed first-lien credit facility with a recovery rating of 2, indicating an expectation for substantial (70% to 90%) recovery for lenders in the event of a payment default. The first-lien credit facility consists of a five-year $50 million revolving credit facility and a six-year $425 million term loan.

S&P also assigned a B- issue rating to the company’s proposed seven-year $195 million second-lien term loan with a recovery rating of 6, indicating expectations for negligible (0% to 10%) recovery in the event of a payment default.

"We based our ratings on Carrollton, Texas-based casual dining operator and franchisor TGIF on its vulnerability to consumer spending and dining trends and its mid-size scale compared with larger operators such as Applebee’s," S&P credit analyst Andy Sookram said in a news release.

"We think its refranchising plans will allow the company to generate sizeable cash proceeds in the near term that would be used for debt reduction and allow the company to improve its earnings and cash flow consistency."

S&P gives Gates Global loan B+, notes B

Standard & Poor's said it assigned its B+ corporate credit rating to Gates Global LLC.

At the same time, the agency assigned its B+ issue rating and 3 recovery rating to the company's proposed $2.8 billion senior secured term loan (which includes a €200 million tranche) and its $125 million cash flow revolver (undrawn at closing). The 3 recovery rating indicates an expectation for meaningful recovery (50%-70%) in a payment default scenario.

In addition, S&P assigned a B issue rating and 5 recovery rating to the proposed $1.4 billion of senior unsecured notes (which includes a €235 million tranche). The 5 recovery rating indicates an expectation for modest recovery (10%-30%) in a payment default scenario.

The company will use the debt proceeds along with equity contributions from the new sponsor to fund the acquisition. The transaction also includes a $325 million asset-based revolver (unrated) that would be undrawn at close.

S&P said the ratings on Gates incorporate aggressive financial policies associated with ownership by its new private equity sponsor, Blackstone.

"Given the very high leverage and lack of track record under the new owner we have limited reasons to believe that debt to EBITDA will fall below 5x in the next 2 years," S&P credit analyst Nishit Madlani said in a news release. "Our assessment also incorporates overarching risks involved with private equity ownership, and that we would closely monitor actions such as significant shareholder distributions or large debt-funded acquisitions. Blackstone has pursued an aggressive financial strategy with other portfolio entities, using debt and debt-like instruments to maximize shareholder returns, in the past."

S&P gives Men’s Wearhouse notes B-

Standard & Poor's said it assigned its B- issue-level and 6 recovery ratings to Men's Wearhouse Inc.'s proposed $600 million senior unsecured notes due 2022.

The 6 recovery rating indicates an expectation for negligible (0% to 10%) recovery in the event of payment default.

The net proceeds, together with borrowings on the company's new credit facilities and cash on hand, will be used to finance the acquisition of JoS. A Bank Clothiers, Inc.

S&P said the B+ corporate credit rating on Men's Wearhouse reflects the company's participation in the highly competitive and widely fragmented men's specialty apparel retail segment, good brand recognition and smaller relative size to primary competitors, which include moderate department stores.

The rating also incorporates the agency’s forecast of relatively consistent cash flow generation, debt to EBITDA in the upper-4x area, funds from operations to total debt in the low-double digits and interest coverage in the low-3x area over the next year.

Moody’s rates Men’s Wearhouse notes B2

Moody's Investors Service said it assigned a B2 rating to Men's Wearhouse, Inc.’s proposed $600 million senior unsecured notes due 2022.

The company’s Ba3 corporate family rating and probability of default rating, as well as the Ba2 rating on the company's $1.1 billion senior secured term loan B, were affirmed.

The SGL-2 speculative grade liquidity rating was affirmed and the outlook remains stable.

Moody’s said the B2 rating assigned to the notes reflects Men’s Wearhouse’s unsecured position, ranking behind a meaningful amount of secured debt in the company's capital structure comprised primarily of the $1.1 billion senior secured term loan B and the $500 million secured asset based revolving credit facility.

Men's Wearhouse will use the proceeds from the notes, the $1.1 billion term loan and cash on hand to fund the acquisition of Jos. A. Bank Clothiers, Inc. for $1.8 billion and to fund fees and expenses associated with the transaction.

S&P assigns VeriFone facilities BB

Standard & Poor's said it assigned VeriFone Inc.'s $1.2 billion first-lien credit facilities a BB issue-level rating with a recovery rating of 2, indicating an expectation for substantial (70%-90%) recovery in the event of a payment default.

The facilities are comprised of a $400 million revolving credit facility due 2019, a $550 million term loan A due 2019 and a $250 million term loan B due 2021.

S&P expects the company to use proceeds from the new credit facilities to refinance the existing credit facilities due 2016.

The BB- corporate credit rating and stable outlook on VeriFone remain unchanged.

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