S&P cuts Moran Foods

S&P said it downgraded Moran Foods LLC to SD from CCC after the company elected to miss an interest payment on Dec. 31 and entered a forbearance agreement.

“The downgrade follows Moran Foods LLC’s (Save-A-Lot’s) missed Dec. 31, 2019, interest payment on its $740 million first-lien term loan. Although the company has reached a forbearance agreement with lenders representing a supermajority position of the loan, we view the missed payment as a default because we do not believe the company will satisfy its payment obligation within 30 days of the due date,” said S&P in a press release.

Save-A-Lot plans to undertake a restructuring S&P views as distressed. Under the proposed transaction, which is supported by lenders representing 67% of the company’s term loan, Save-A-Lot will cut debt by more than $400 million and receive $138 million in new capital.

“The announcement follows years of heavy losses as the company has grappled with intense competition, execution issues, and a substantial debt burden that has constrained financial flexibility,” S&P said.

Fitch upgrades Banca Carige

Fitch Ratings said it upgraded Banca Carige SpA - Cassa di Risparmio di Genova e Imperia’s long-term issuer default rating to B- from CCC. The outlook is stable. Fitch also upgraded the bank’s viability rating to b- from f.

The upgrade follows the recapitalization of the bank through a €700 million capital increase, the issue of €200 million tier 2 notes and the sale of a €2.4 billion portfolio of impaired loans to AMCO - Asset Management Company SpA.

The upgrade of the VR reflects Fitch’s opinion the capital strengthening and balance-sheet de-risking have restored the bank’s viability. “We view Carige’s capitalization as being restored with sufficient buffers above regulatory capital requirements with an estimated common equity tier 1 ratio and total capital ratio of 13.3% and 15.2%, respectively at end-2019,” Fitch said in a press release.

Moreover, following the large sale of impaired loans to AMCO, including an added €400 million transaction likely to be completed by the end March, Carige will substantially reduce its impaired loans ratio and capital encumbrance by unreserved impaired loans to levels that compare favorably with most domestic peers, the agency said.

Moody’s view on Banca Monte dei Paschi to positive

Moody's Investors Service said it changed the outlook on the senior unsecured debt rating of Banca Monte dei Paschi di Siena SpA to positive from negative and upgraded the subordinated debt rating to Caa1 from Caa2. Moody’s also affirmed the long-term senior unsecured debt at Caa1 and B1 respectively.

The outlook on the bank’s long-term senior unsecured debt reflects the possibility for a further material reduction in the bank's problem loans in the medium term whilst maintaining capital levels above regulatory requirements and additional progress in restoring the franchise value the bank.

The upgrade of the subordinated debt rating mirrors the upgrade of the baseline credit assessment, which reflects material improvements in the bank’s asset quality. The bank disclosed a pro-forma problem loan ratio of around 12.5% for end-2019, materially down from 18% as of end-2018, as a result of the disposal of €3.8 billion of gross problem loans.

In addition, the bank improved its funding profile reestablishing some access to wholesale funding, the agency said.

Moody’s revises Chesapeake Energy view to stable

Moody’s Investors Service said it changed the outlook for Chesapeake Energy Corp. to stable from negative, affirmed the company’s Caa1-PD and appended the rating with an LD designation.

Moody’s upgraded the company’s speculative grade liquidity rating to SGL-3 from SGL-4. The company’s other ratings were affirmed. At the same time, Moody’s withdrew Brazos Valley Longhorn, LLC’s Caa1 corporate family rating and the Caa2 senior unsecured notes rating of Brazos Valley’s predecessor entity, WildHorse Resource Development Corp.

The actions follow completion of a debt exchange Chesapeake started on Dec. 4. The company exchanged $3.2 billion of its senior unsecured notes for $2.21 billion of second-lien notes Moody’s said it considers the debt exchange a distressed exchange, which is a default under the rating agency’s definition. As such, Moody’s appended the PDR with an /LD designation to indicate a limited default, which will be removed after three business days.

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