S&P downgrades MMM to D

Standard & Poor's said it lowered its counterparty credit and secured debt ratings on MMM Holdings Inc. to D from B- and removed all ratings from CreditWatch, where they were placed with developing implications on June 5.

"MMM – the downstream holding company of Innovacare Inc. – did not make its quarterly amortization payment on its first-lien term loan for third-quarter 2015,” S&P credit analyst James Sung.

"The company has entered into a forbearance agreement with its lenders that will provide time for the parties to negotiate a potential restructuring of the credit agreement. The forbearance agreement is effective until the earlier of Oct. 30, 2015, or various termination events outlined in the document."

S&P downgrades Affinion

Standard & Poor’s said it lowered the corporate credit rating on Affinion Group Holdings Inc. to CC from CCC+.

The agency also said it lowered the rating on the company’s 13¾% and 14½% payment-in-kind toggle notes due 2018 to CC from CCC-.

The recovery rating remains at 6, indicating 0 to 10% expected default recovery.

S&P also said it lowered the rating on the company’s 13½% senior subordinated notes due 2018 to CC from CCC-.

The recovery rating debt remains at 6, indicating 0 to 10% expected default recovery.

The outlook is negative.

Affinion Investments LLC, an existing wholly owned unrestricted subsidiary of Affinion Group Inc., is the borrower of this debt.

The downgrade follows news of Affinion’s offer to exchange up to $600 million of its debt for common stock, the agency said.

If the company completes the exchange transaction, S&P said it views it as distressed and tantamount to a default.

S&P lowers GenOn, debt

Standard & said it lowered its corporate credit ratings on GenOn Energy Inc. and its affiliate GenOn Energy Holdings Inc. to CCC+ from B-.

The outlook is stable.

Because of the change in the corporate credit rating, the agency also lowered the issue ratings on the $1.95 billion of unsecured notes at GenOn Energy, the issue rating on the $770 million of pass-through certificates ($665 million outstanding) at GenOn Mid-Atlantic LLC (GenMA) and the ratings on $850 million unsecured notes at GenOn Americas LLC (GenAM) to B- from B.

Similarly, the B+ issue rating on the $641 million of pass-through certificates (about $391 million outstanding) at REMA were lowered to B.

"The rating action follows a progressively weaker forward power curve due to depressed natural gas prices, and lower gross margins due to stagnating demand and milder weather patterns, resulting in a further weakening of financial measures," S&P credit analyst Aneesh Prabhu said in a news release.

"While the capacity performance incremental auctions provide some uplift in margins, they do not offset the energy margin compression."

S&P cuts Wynn Macau notes, rates loans BB

Standard & Poor's said it assigned its BB issue-level rating to Wynn Resorts (Macau) SA's amended senior secured credit facilities.

The $3.05 billion credit facility consists of a $750 million revolving credit facility due September 2020 and a $2.3 billion term loan due September 2021. The rating is at the same level as the corporate credit rating on the parent company, Wynn Macau Ltd.

At the same time, the agency lowered its issue-level rating on Wynn Macau's $1.35 billion senior notes due 2021 one notch to B+ from BB-.

Wynn Macau is a subsidiary of Wynn Resorts Ltd.

Proceeds from the amended credit facilities will be used to refinance existing debt, fund the construction and development of Wynn Palace in the Cotai area of Macau and for general corporate purposes. The amended credit facilities will extend the company's debt maturities, reduce pricing and loosen financial maintenance covenants, improving its overall liquidity and financial flexibility.

S&P said the note downgrade reflects its expectation that Wynn Macau's priority liabilities as a percentage of total assets will exceed 30% over the next few years.

Fitch rates Wynn Macau loan BBB-/RR1

Fitch Ratings said it assigned a BBB-/RR1 rating to Wynn Resorts (Macau) SA's $3.05 billion senior secured credit facility.

Wynn Macau’s current issuer default rating is BB and its outlook is stable. The issuer default rating is linked to the issuer default ratings of the ultimate parent company Wynn Resorts Ltd. and other rated subsidiaries including Wynn Macau Ltd., the Hong Kong listed parent of Wynn Macau.

Proceeds will be used to finance the development of Wynn Macau’s $4.1 billion Wynn Palace, due to open March 2016, refinance the existing facility ($1.5 billion outstanding as of June 30) and provide additional liquidity to the consolidated Macau operations.

The debt increase in Macau is in line with Fitch's prior forecasts, which assumed the Wynn Macau subsidiaries raising a total of $1.4 billion of debt in 2015 and no further debt raises in 2016. Fitch believes Wynn Palace is now fully funded, the need to draw on the Macau revolver will be limited and seeking commitments for the accordion will not be necessary to finish Wynn Palace.

Moody’s could lift First Data

Moody's Investors Service said it placed the ratings of First Data Corp., including the B3 corporate family rating, under review for upgrade following the launch of its initial public offering.

First Data intends to use net proceeds to redeem all of its $510 million of 11¼% senior unsecured notes due 2021 and about $2 billion of its 12 5/8% senior unsecured notes due 2021.

The agency expects to conclude the review following the completion of the IPO, which is expected to occur in October.

Moody’s said the review reflects its view that First Data's planned IPO will reduce adjusted debt to EBITDA to below 7 times. With the agency’s expectation of mid-single percentage digit profit growth over the next year, leverage should further improve to the mid-6 times by the end of 2016.

If First Data completes its IPO as planned, Moody's would likely upgrade the corporate family rating to B2. Despite the upgrade of the corporate family rating, the ratings on certain debt instruments could remain unchanged given the shift in the mix of debt in the capital structure.

S&P keeps Central European Media on watch

Standard & Poor's said it maintained its CreditWatch with negative implications on its B corporate credit rating on Central European Media Enterprises Ltd.

The company announced that it entered into a senior unsecured term credit facility guaranteed by Time Warner and provided by a bank syndicate. S&P said it considers this to be a material advancement in relation to refinancing the upcoming $261 million maturity of Central European Media’s convertible notes, due on Nov. 15, 2015.

At the same time, the lenders' commitment to providing funds shortly before that date depends on the company meeting certain terms. For example, the agreement contains a material adverse change clause as a condition precedent for funding, which could prevent timely repayment of the upcoming maturity, in the agency’s view.

S&P rates Novomatic CCR, notes, loans BBB

Standard & Poor's said it assigned its BBB/A-2 long- and short-term corporate credit ratings to Novomatic AG.

The outlook is stable.

At the same time, the agency assigned a BBB long-term issue rating to the company's €600 million senior unsecured notes, maturing in 2017, 2019, and 2021.

It also assigned a BBB rating to the €440 million backup credit facilities, maturing in 2018 and 2020.

S&P said the ratings reflect its assessment of Novomatic’s "satisfactory" business risk and "minimal" financial risk profiles. They also incorporate the agency’s expectation of a substantial rise in leverage resulting from future major acquisitions over the next 24 months.

S&P has not factored in such acquisitions, such as the targeted acquisition of a stake in Casinos Austria, into its base-case assumptions and leverage ratios at this stage.

S&P rates Southern junior notes BBB

Standard & Poor's said it assigned its BBB long-term issue rating to Southern Co.'s series 2015A junior subordinated notes due Oct. 15, 2075.

The agency classifies these hybrid securities being issued by the Atlanta-based utility holding company as having intermediate (50%) equity content.

The issue rating is notched down two notches from the A- issuer credit rating to reflect the instrument's subordination to more senior obligations and deferability of its interest payment.

The outlook is negative.

Fitch applies BBB+ to Southern junior notes

Fitch Ratings said it assigned a BBB+ rating, on Rating Watch Negative, to Southern Co.’s series 2015A junior subordinated notes due Oct. 15, 2075.

Net proceeds will be used to pay a portion of outstanding short-term debt, which stood at $524 million as of Sept. 30, and for general corporate purposes.

The debentures are junior and subordinated in right of payment and upon liquidation to all of Southern's senior debt. Southern may defer interest payments on the debentures on one or more occasions for up to 10 consecutive years per deferral period.

Moody’s rates Sucampo loan B3

Moody’s Investors Service said it assigned first-time ratings to Sucampo Pharmaceuticals, Inc., including a B3 corporate family rating, B3-PD probability of default rating, B3 (LGD 3) rating on the senior secured first-lien term loan and SGL-2 speculative grade liquidity rating.

The outlook is stable.

The proceeds of the debt offering, together with cash on hand, will be used to fund the acquisition of R-Tech Ueno for about $278 million and to refinance Sucampo’s existing debt, Moody’s said.

The ratings reflect Sucampo’s limited size and scale and its significant product concentration risk with essentially all sales derived from a single product, the agency said.

Sales of this product, Amitiza, will steadily grow globally based on growth in the prescription market for various forms of chronic constipation, Moody’s said.

But, the company is exposed to high concentration risk and competitive pressures, as well as the threat of generic drugs, the agency said.

S&P assigns Sucampo CCR, loan B

Standard & Poor's said it assigned its B corporate credit rating to Sucampo Pharmaceuticals Inc.

The outlook is stable.

At the same time, the agency assigned its B issue-level rating and 3 recovery rating to the proposed first-lien credit term loan. The 3 recovery rating reflects an expectation for meaningful (50% to 70%, at the high end of the range) recovery in the event of a payment default.

"The B corporate credit rating on specialty pharmaceutical company Sucampo reflects the company's reliance on a single product and its relatively small size," S&P credit analyst Tulip Lim said in a news release.

S&P gives B+ to Invenergy loans

Standard & Poor's said it assigned its preliminary B+ rating to Invenergy Thermal Operating I LLC's roughly $395 million term loan due 2022 and $70 million first-lien working capital loan facility due 2020.

The outlook is stable.

The agency also assigned its preliminary 1 recovery rating to the term loan and credit facility, indicating very high (90% to 100) recovery under a default scenario.

S&P withdrew the preliminary B+ rating and preliminary 2 recovery rating we issued in July for Invenergy for a planned debt issuance it never launched.

"We expect consolidated DSCRs to be about 1.31x to 1.33x initially and rising to 1.4x by 2019," S&P credit analyst Geoffrey Mrema said in a news release.

"We assume that existing plants will operate in line with historical patterns, and that new construction will operate in line with industry standards."

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.