Moody’s upgrades Pernod Ricard

Moody's Investors Service said it upgraded to Baa2 from Baa3 the long-term issuer and senior unsecured ratings of Pernod Ricard SA.

The agency also said it has upgraded the short-term ratings of both Pernod and its guaranteed subsidiary, Pernod Ricard Finance SA, to prime-2 from prime-3.

The outlook is stable.

The upgrades reflect an expectation that Pernod will continue to reduce its financial leverage over the next 12- to 18-months while maintaining a prudent financial policy and adequate liquidity profile, Moody’s said.

The upgrades also consider an opinion that Pernod's credit metrics will slowly improve in 2016 through 2017 as the gradual recovery in the U.S. market and lower one-off cash outflows strengthen free cash-flow generation, the agency said.

The upgrade also reflects an expectation that the company will maintain a conservative financial policy, Moody’s added.

Fitch upgrades SEB

Fitch Ratings said it upgraded Skandinaviska Enskilda Banken AB’s (SEB) long-term issuer default rating to AA- from A+, viability rating to AA- from A+ and short-term issuer default rating to F1+ from F1.

The outlook is stable.

Fitch also said it upgraded the long- and short-term issuer default ratings of SEB’s wholly-owned subsidiary SEB AG to AA- from A+ and F1+ from F1, respectively.

The upgrades reflect strong execution by SEB of its long-term strategy of de-risking its operations and improving earnings stability and diversification, with reduced reliance on capital markets income, Fitch explained.

Combined with a strong cost focus, SEB’s expanded retail and wider Nordic/German corporate franchises have led to solid financial metrics, the agency said.

The positive trend also is expected to continue, Fitch added.

Fitch lifts Svenska Handelsbanken

Fitch Ratings said it upgraded Svenska Handelsbanken AB’s long-term issuer default rating to AA from AA-, viability rating to AA from AA- and affirmed its short-term issuer default rating at F1+.

The outlook is stable.

Fitch also said it upgraded the long-term issuer default rating of wholly-owned subsidiary Stadshypotek to AA from AA-.

The upgrades reflect the banking group’s through-the-cycle resilient financial metrics, which compare well to other highly rated international banks, the agency said.

The bank’s financial profile is underpinned by its highly successful and traditional business model that focuses on stable long-term strategic objectives, Fitch said.

The bank’s strong earnings and profitability should remain healthy, driven by robust income generation, good cost efficiency and low loan impairment charges, the agency added.

Moody’s lifts Western Massachusetts Electric

Moody's Investors Service said it upgraded Western Massachusetts Electric Co.'s issuer and senior unsecured ratings to A2 from A3.

The outlook is stable.

The upgrade is driven by a strong financial profile, which is expected to continue as the utility becomes more FERC-regulated, Moody’s said.

The agency said it views FERC's regulatory oversight as lower risk because it is more credit supportive than most state jurisdictions.

The ratings also reflect the company’s low-risk business profile as a transmission and distribution utility, Moody’s said, along with solid financial metrics.

S&P: CBL & Associates on watch

S&P said it placed the BBB- corporate credit rating on CBL & Associates Properties Inc. on CreditWatch with negative implications.

The negative watch reflects the lack of a definitive resolution to the recent allegations about accounting errors, S&P said.

The agency said it thinks CBL faces some reputational uncertainty that could impair its access to the capital markets or make negotiations of planned dispositions difficult, the agency said.

The CreditWatch will be resolved within 90 days if the company releases further definitive information, S&P added.

Moody’s: Gap view to negative

Moody's Investors Service said it changed the outlook on the Gap, Inc. to negative from stable.

Moody's also said it affirmed the company's Baa2 senior unsecured rating.

The outlook revision reflects the continued and persistent weakness in sales for all three of the company's meaningful brands, which resulted in a steep drop in operating earnings and weaker credit metrics, the agency said.

The negative outlook also considers an uncertainty about management's ability to improve performance as a shift in consumer trends and competitive pressures create further headwinds, Moody’s explained.

Although the downward pressure on sales and operating income are expected to continue for the remainder of this fiscal year, leverage is still expected to be modest at less than 3x, the agency said.

Fitch rates Jabil notes BBB-

Fitch Ratings said it assigned a BBB- rating to Jabil Circuit, Inc.'s announced private placement of $300 million of senior unsecured notes due June 2023.

The proceeds will be used to repay Jabil's $312 million of existing 7¾% senior notes due July 2016.

Jabil has a long-term issuer default rating of BBB-, senior unsecured revolver rating of BBB- and senior unsecured notes rating of BBB-.

The outlook is stable.

The ratings reflect the company’s balanced global manufacturing footprint and full suite of increasingly complex EMS product offerings, Fitch said.

The company also benefits from high barriers to entry, the agency said.

But the company does derive a significant portion of its revenue from a small number of customers, Fitch said.

S&P rates Nykredit notes BBB+

S&P said it assigned a BBB+ long-term issue rating to the proposed senior resolution notes to be issued by Nykredit Realkredit A/S.

The proposed notes will be the first issued globally by an operating company and the notes will be part of the debt-buffer requirement that the Danish authority added to its implementation of the E.U. banking recovery and resolution directive specifically for mortgage institutions, S&P said.

The proposed notes will at all times, including in resolution, rank senior to Nykredit Realkredit's ordinary shares and more junior notes, such as additional tier 1 instruments and existing tier 2 non-deferrable subordinated debt, but junior to senior debt, the agency said.

The ratings reflect an analysis of the proposed notes, as well as an assessment of Nykredit Realkredit's stand-alone credit profile at A-, S&P said.

The rating is one notch lower than the stand-alone rating, reflecting the subordination risk, the agency said.

Moody’s rates Sinai Health notes Aa2

Moody's Investors Service said it assigned an Aa2 debt rating to Sinai Health System's planned C$200 million senior unsecured debenture.

The outlook is stable.

The Aa2 rating reflects the close relationship and strong financial linkages between Sinai Health and the province of Ontario, which funds, regulates, oversees and closely monitors the provincial hospital sector, Moody’s said.

The high investment-grade rating reflects the company’s stable operating profile, manageable debt and low interest burden, the agency said.

The rating also considers its strong market position and brand name as one of Ontario's preeminent health care institutions, Moody’s said.

Fitch rates Walgreens Boots notes BBB

Fitch Ratings said it assigned a BBB rating to Walgreens Boots Alliance, Inc.’s $6 billion senior unsecured notes.

The notes, which range in maturity from 2018 to 2046, will be used to partly fund the company’s acquisition of Rite Aid Corp., assuming regulatory approval.

The company has a long-term issuer default rating of BBB and stable outlook.

Of the total $17 billion purchase price for Rite Aid, Walgreens Boots is funding the acquisition with $14.6 billion of debt, including the assumption of $2.3 billion of Rite Aid’s existing unsecured debt, the agency said.

The ratings reflect the company’s leading position and increasing market share in the growing drugstore category, Fitch said.

Its ample free cash flow provides it the financial flexibility to strategically invest in its business and new opportunities while managing its balance sheet, the agency said.

Moody’s: Walgreens notes Baa2

Moody’s Investors Service said it assigned a Baa2 to Walgreens Boots Alliance, Inc.’s proposed senior unsecured notes benchmark offering not to exceed $6 billion.

The outlook remains on review for downgrade.

The proceeds, along with funds raised from the issuance of new term loan facilities, will be used to fund a portion of the cash consideration to acquire Rite Aid Corp., Moody’s said.

The transaction is expected to close in the second half of 2016, the agency added.

The proposed notes that will mature in 2018, 2021, and 2023 will be subject to a mandatory redemption in the event that the proposed acquisition of Rite Aid is not completed, the agency said.

The new notes that mature in 2026 and 2046 will not have a mandatory redemption provision, Moody’s said.

The agency said it estimates that pro forma for the estimated $2 billion to $2.5 billion of debt that would stay on Walgreens’s balance sheet in the event the acquisition of Rite Aid does not close, its debt-to-EBITDA ratio will increase to about 3.9x from 3.7x times for the 12 months that ended in February 2016.

But Walgreens does have the ability to repay the debt, should this occur, Moody’s said.

The agency said it anticipates that should the transaction receive regulatory clearance with a level of store divestitures and closings outlined in the merger agreement, Walgreens’s senior unsecured rating would be downgraded to Baa3 and its commercial-paper rating would be downgraded to prime-3 with a stable outlook.

S&P: Walgreens Boots notes BBB

S&P said it assigned a BBB rating to Walgreens Boots Alliance Inc.’s proposed tranches of senior unsecured notes due 2018, 2021, 2023, 2026 and 2046.

The proceeds will be used to fund a portion of the cash consideration for the Rite Aid Corp. acquisition, including fees and expenses, S&P said, and refinance a portion of Rite Aid’s outstanding debt.

Walgreens Boots will use the remaining proceeds to repay short-term borrowings, the agency said.

This transaction is not expected to change the pro-forma leverage of 4.2x for the Rite Aid transaction, S&P said.

Walgreens Boots’ BBB corporate credit rating and negative outlook are unchanged.

The ratings reflect Walgreens Boots plans to acquire Rite Aid in a transaction that could present integration issues given the substantial amount of resources required to remodel and improve Rite Aid’s stores, S&P explained.

Funding the Rite Aid transaction largely with debt and existing cash will temporarily weaken Walgreens’s leverage, which is expected to rise to more than 4x at transaction closing, from about 3.4x in February.

The merger benefits, including cash flow improvement and pre-payable capital structure, will allow Walgreens to bring leverage to about 4x within three financial quarters after the acquisition, S&P said.

Moody’s: Brookfield debt Baa2

Moody's Investors Service said it assigned a Baa2 unsecured debt rating to Brookfield Financial Inc., a subsidiary of Brookfield Asset Management that will issue its U.S. unsecured debt.

This rating reflects the sustainability of cash flow generated by Brookfield's core holdings, the agency said.

The rating also considers the company’s history of ventures with high quality counterparties, Moody’s said.

Brookfield's liquidity and funding, along with its well-laddered debt maturity schedule, are key credit positives supporting the rating, the agency added.

S&P: General Motors loan BBB-

S&P said it assigned BBB- ratings to General Motors Co.'s $14.5 billion revolving credit facilities.

The facilities will consist of a $4 billion three-year credit facility and $10.5 billion five-year credit facility.

These facilities will replace the company's existing $12.5 billion credit facilities.

Following the creation of the new facilities, the agency said it believes that the company's automotive liquidity will remain strong and in line with most of its automotive peers.

The company has allocated a higher amount to its five-year tranche, which is roughly similar to what its peer Ford Motor Co. completed with the last amendment to its revolving credit facility, the agency said.

General Motors is expected to use the new revolver to fund working capital, issue letters of credit, help manage intra-year seasonality in its cash flows and potentially fund the company's strategic cash requirements, S&P said.

It is unlikely that the company will keep the revolver drawn for an extended period as it views it as backstop for unforeseen events, such as a severe industry downturn, the agency added.

© 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.