S&P lowers NGPL to CCC

Standard & Poor's said it lowered its issuer credit and senior secured ratings on NGPL PipeCo LLC to CCC from CCC+.

The outlook is negative.

The recovery rating is unchanged at 3, indicating "meaningful" (50% to 70%; lower half of the range) expectation of principal recovery if a default occurs.

S&P said the downgrade stems from a combination of related factors. During the past 2½ years, NGPL's financial performance has declined considerably due to reduced throughput on the Louisiana Line. This has stemmed from lower demand for Gulf Coast gas, driven by sharply increased supply from the Marcellus and Utica shale gas-producing areas.

Usage rates have thus been below the agency’s expectations, resulting in adjusted debt to EBITDA of more than 10 times for the 12 months ended March 31. S&P expects that leverage will remain around this level through the end of the year.

S&P lowers Vantage, debt to CCC

Standard & Poor's said it lowered its corporate credit rating on Vantage Drilling Co. to CCC from B-.

At the same time, the agency lowered its issue-level rating on the company's secured debt to CCC from B-. The recovery rating remains 3, indicating an expectation of meaningful (50% to 70%, higher end of the range) recovery in the event of a payment default.

S&P said the downgrade follows Vantage's announcement that it has retained Lazard Freres & Co. to assist in reviewing financing and strategic opportunities.

The company's debt trades substantially below par value and the agency believes that the company could consider a distressed exchange, which it would view as tantamount to default.

S&P cuts Walter Energy, debt

Standard & Poor's said it lowered its corporate credit rating on Walter Energy Inc. to D from CCC- and its issue-level ratings to D.

The recovery rating on the senior secured debt is 2, which indicates an expectation for recovery at the lower half of the substantial (70% to 90%) recovery range.

The recovery rating on the second-lien debt and the senior unsecured obligations is 6, which indicates an expectation for negligible (0% to 10%) recovery.

S&P said it lowered the ratings after Walter Energy elected not to pay about $19 million in aggregate interest payments on its 9 7/8% senior notes due 2020.

A payment default has not occurred under the indentures governing the notes, which provide a 30-day grace period. However, the agency considers a default to have occurred because it does not expect a payment to be made within the stated grace period given the company's heavy debt burden, which it views to be unsustainable.

In S&P’s opinion, the company will exhaust its sources of liquidity within six months. Cash and investments totaled roughly $435 million on March 31.

Moody's upgrades Delta

Moody's Investors Service said it upgraded Delta Air Lines, Inc.’s corporate family rating to Ba2 from Ba3; probability of default rating to Ba2-PD from Ba3-PD; $396 million senior secured term loan B2, $1.23 billion senior secured first-lien revolver, $450 million senior secured revolver, $1.38 billion senior secured first-lien term loan and $1.09 billion senior secured term loan B1 to Baa3 (LGD2) from Ba1 (LGD2); $217 million senior secured bank credit facility to Baa2 from Baa3; series 2009-1A, 2010-1A, 2011-1A and 2010-2A senior secured enhanced equipment trust certificates to A2 from A3; series 2010-2B senior secured enhanced equipment trust certificates to Ba1 from Ba2; series 2007-1B, series 2010-1B and series 2012-1B senior secured enhanced equipment trust certificates to Baa3 from Ba1 and series 2009-1B senior secured enhanced equipment trust certificates to Baa2 from Baa3.

Old Delta Air Lines, Inc.’s series 2002-1G1 senior secured enhanced equipment trust certificates were upgraded to Baa1 from Baa2.

The agency also upgraded Northwest Airlines, Inc.’s series 2000-1G senior secured enhanced equipment trust certificates to Ba1 from Ba3, series 2007-1A senior secured enhanced equipment trust certificates to A3 from Baa1 and series 2007-1B senior secured enhanced equipment trust certificates to Baa2 from Baa3.

The remaining ratings were affirmed, and the outlook remains positive.

"The upgrade to Ba2 reflects Moody's expectation of noticeably stronger credit metrics through 2015, derived from the company's long-running focus on reducing funded debt, effective capacity management and significantly lower fuel expenses," vice president and senior credit officer Jonathan Root said in an agency news release.

The positive outlook anticipates that credit metrics can further strengthen through 2016. Moody's believes that Delta will continue to whittle down its funded debt.

S&P could cut Swift notes, rates loan B+

Standard & Poor's said it assigned its B+ issue-level rating to Swift Energy Co.'s proposed $640 million senior secured term loan due 2020.

The recovery rating is 1, indicating an expectation of very high (90% to 100%) recovery in the event of payment default.

The agency also placed the CCC+ issue-level rating and 5 recovery rating on the company's senior unsecured notes on CreditWatch with negative implications.

The outlook was revised to negative from stable and the B- corporate credit rating was affirmed.

"The negative rating outlook on Swift Energy reflects the possibility that leverage could deteriorate beyond our current expectations, remaining at levels we would view as unsustainable in 2016," S&P credit analyst John Rogers said in a news release.

S&P might cut DynCorp

Standard & Poor's said it placed all ratings, including the B- corporate credit rating, on DynCorp International Inc. (DI) on CreditWatch with negative implications.

"The CreditWatch placement reflects the potential refinancing risks associated with DI's upcoming debt maturities," S&P credit analyst Chris Mooney said in a news release.

The company's $187 million term loan and undrawn $145 million revolver mature in July 2016 while its $455 million of unsecured notes mature in July 2017. The company faces difficult defense market conditions, which have resulted in lower margins, heightened competition, and the possibility that it may lose a significant contract, INL Air Wing.

"While we believe that the company will generate enough cash to meet its interest payments over the next 12 months, these factors could make refinancing its upcoming debt maturities challenging," Mooney added in the release.

S&P rates CNH Industrial notes BB

Standard & Poor's said it assigned its BB issue-level rating to CNH Industrial Capital LLC's proposed senior unsecured notes.

CNH Industrial Capital America LLC (unrated) and New Holland Credit Co. LLC, each a wholly owned subsidiary of CNH Industrial Capital, will guarantee the notes.

Proceeds will be used for the purchase of receivables, working capital, the repayment of maturing debt or other general corporate purposes.

S&P said the rating on the proposed senior unsecured notes reflects the company's reliance on secured debt, primarily through asset-backed security transactions, which the agency believes continues to encumber a significant majority (62% at the end of 2014) of the assets on its balance sheet and weakens the recovery prospects for the unsecured debtholders in the event of a default.

Still, the ratio of secured debt to assets has declined, the company has access to unsecured committed credit lines, and S&P views the proposed notes issuance as a consistent step toward achieving greater funding diversification. This should gradually reduce reliance on the asset-backed securities market, which the agency would consider a positive rating factor over time.

Moody's rates Heinz debt Baa3

Moody's Investors Service said it assigned provisional Baa3 ratings to about $12 billion of senior notes and $4.6 billion of senior credit facilities that are being offered by H.J. Heinz Co. (Ba3/under review for upgrade).

Heinz is issuing the debt in connection with its pending merger with Kraft Foods Group, Inc. (Baa2/ under review for downgrade). The merger will create the Kraft Heinz Co.

All existing ratings of Heinz and Kraft will remain under review until the merger transaction is imminent and the final capital structure details are finalized. At that time, Moody's will assign definitive Baa3 ratings to the new merger debt and expects to upgrade all other senior debt of Heinz and subsidiaries to Baa3 from B2 and upgrade all outstanding second-lien secured debt of Heinz and subsidiaries to Baa2 from B1.

The provisional Baa3 rating reflects Moody's anticipation that the combined entity will have a significantly stronger credit profile than Heinz pre-merger and Moody's confidence that the senior management team of Kraft-Heinz, to be led by 3G Capital, will achieve the targeted $1.5 billion of run-rate cost savings, significant working capital reductions and $2 billion of debt repayment in the first two years after the merger.

Fitch to rate Wintrust preferreds B+

Fitch Ratings said it expects to assign a B+ rating to Wintrust Financial Corp.'s $125 million series D non-cumulative perpetual preferred stock issuance.

Proceeds will be used for general corporate purposes, which may include, investments at the holding company level, providing capital to support growth, acquisitions or other business combinations, including FDIC-assisted acquisitions and reducing or refinancing existing debt.

The hybrid instrument is expected to be rated five notches lower than Wintrust’s viability rating of bbb in accordance with Fitch's “Global Bank Rating Criteria” dated March 20. The rating includes two notches for loss severity given these securities' deep subordination in the capital structure and three notches for non-performance given that the coupon of the securities is non-cumulative and fully discretionary.

Moody’s lifts SS&C to positive

Moody’s Investors Service said it affirmed SS&C Technologies Holdings, Inc.’s B1 corporate family rating, B1-PD probability of default rating and the provisional Ba3 and provisional B3 ratings for the its senior secured credit facilities and senior unsecured notes.

The agency also said it changed SS&C’s outlook to positive from stable following news that will raise $650 million in proceeds from equity offering of its common stock, which is $250 million higher than previously expected.

The positive outlook reflects SS&C’s robust liquidity and a view that SS&C will have ample flexibility to reduce debt at an accelerated pace and maintain capacity to fund moderate size acquisitions, Moody’s said.

The ratings reflect SS&C’s elevated financial risk over the next 12- to 18-months and management’s high financial risk tolerance and acquisitive growth strategy, the agency said.

The SGL-1 liquidity rating reflects SS&C’s very good liquidity comprising cash balances, projected free cash flow and borrowing capacity under the new $150 million revolving credit facility, Moody’s said.

S&P changes British Airways to positive

Standard & Poor's said it revised its outlook on British Airways plc to positive from stable and affirmed the BB long-term corporate credit rating.

The agency also affirmed its long-term issue rating on British Airways’ class A and B enhanced equipment trust certificates at A and BBB, respectively, and the BB rating on its £250 million unsecured bonds due 2016.

The B issue ratings on the €300 million notes of subsidiary British Airways Finance (Jersey) LP was also affirmed.

S&P said the outlook revision reflects its view that the British Airways’ standalone credit profile is bb+ and hence could support a higher rating.

However, the rating is constrained by the agency’s view of the credit metrics of parent IAG. S&P believes there is uncertainty around IAG's credit metrics at this stage due to the potential acquisition of Aer Lingus and the subsequent impact on its credit ratios.

The agency said it could raise the ratings on British Airways if IAG acquires Aer Lingus and is able to maintain credit metrics that would support a higher rating on British Airways.

Moody's revises Brunswick outlook to positive

Moody's Investors Service said it changed Brunswick Corp.'s outlook to positive from stable and affirmed its corporate family rating at Ba1, probability of default rating at Ba1-PD, senior unsecured and unguaranteed notes due 2023-2027 at Ba2 (LGD6), $150 million senior unsecured notes with subsidiary guarantees due 2021 at Ba1 (LGD3) and speculative grade liquidity rating at SGL-1.

The outlook revision is due to Moody's view that the company's steady improvement in its operating performance and credit metrics will continue and that the company has enough financial flexibility and liquidity to withstand a reasonable economic downturn and still maintain a strong credit profile.

Brunswick's Ba1 corporate family reflects the company's strong position in fitness and in the leisure marine sector, the good operating performance of Brunswick's distribution network and the company's solid credit metrics, the agency said.

Moody’s said the company's ratings are constrained by the highly discretionary nature of pleasure boats and marine-related products, which makes Brunswick's revenues and earnings highly sensitive to economic weakness.

Moody’s changes Darden view to positive

Moody's Investors Service said it changed Darden Restaurants, Inc.'s outlook to positive from stable and affirmed its Ba1 corporate family rating, Ba1-PD probability of default rating, Ba1 (LGD4) senior debt rating and SGL-2 speculative grade liquidity rating.

The agency said the change in outlook in part reflects a more balanced approach of financial policy in regards to the use of proceeds from the proposed real estate monetization being applied to pay down funded debt. The outlook change also reflects Moody’s expectation that operating performance, earnings and credit metrics should gradually improve as management continues to focus on driving profitable same-store sales growth and reducing costs in addition to lower adjusted debt levels.

The affirmation of the Ba1 corporate family ratings reflects the scale of Darden's restaurants that are well known and relatively well distributed throughout the United States, Darden's brand diversity and Moody's expectation that Darden's liquidity will remain good.

The ratings also reflect Darden's relatively weak same-store sales performance to date, earnings concentration of its core brand Olive Garden and the concern that executing a sustained turnaround of this trend over the intermediate term will be challenging, the agency said.

Moody's changes PBF outlook to positive

Moody's Investors Service said it changed PBF Holding Co. LLC's outlook to positive from stable and affirmed its Ba3 corporate family rating, its Ba3-PD probability of default rating and the Ba3 rating assigned to its senior secured notes.

On June 19, PBF's parent, PBF Energy Inc., announced that it signed an agreement to purchase the Chalmette refinery from subsidiaries of ExxonMobil and Petroleos de Venezuela, SA. The $322 million purchase price plus an estimated $300 million to $500 million of working capital will be funded using a combination of cash and debt. The transaction is expected to close in the fourth quarter of 2015.

"PBF's positive rating outlook reflects the expected increase in refining scale and geographic diversification and the potential for better crude sourcing and product distribution ability if the Chalmette refinery acquisition closes as anticipated in 2015," Arvinder Saluja, a Moody's vice president, said in an agency news release. "This acquisition builds on PBF's four-year track record of operating its existing three refineries."

The agency said it could upgrade the ratings if PBF develops a longer track record of profitable operations at the Delaware City refinery, appears able to maintain a ratio of RCF to debt above 50% and demonstrates financial and operational ability to manage environmental risks at the Chalmette refinery after closing the acquisition.

Moody’s could downgrade the ratings if Chalmette or other acquisitions materially increase business risk or decrease profitability or if the ratio of RCF to debt is expected to decrease to below 10%.

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