S&P ups Cimpress, rates facility BB

S&P said it upgraded Cimpress plc’s rating to BB- from B+ and its senior unsecured notes to B from B-. The recovery rating on the notes is unchanged at 6. Concurrently, the agency a BB rating to its planned $1.4 billion first-lien credit facility, comprising a $795 million term loan, a €300 million term loan and a $250 million revolving credit facility.

“Although its leverage will remain elevated at about 4.8x, as of March 2021 on a trailing 12-month basis, we expect its leverage will gradually decline below 4x over the next 12 months as it laps weaker quarters in the previous year, when its operations saw a significant impact from lockdowns imposed following the onset of the pandemic,” S&P said in a press release.

Cimpress will use the loan proceeds to redeem its $300 million second-lien debt when eligible to do so on or shortly after May 15. The proceeds will also be used to repay its term loan and all outstanding balance on its $850 million revolving credit facility, which will be reduced to $250 million.

The outlook is stable.

S&P ups Allegiant Travel

S&P said it upgraded Allegiant Travel Co. to B+ from B and the ratings on its $545 million term loan B and $150 million of senior secured notes to BB- from B+. The 2 recovery rating on the debt is unchanged.

“Although Allegiant Travel Co.’s revenue and earnings were impaired by the steep decline in the demand for air travel due to the Covid-19 pandemic in 2020, they were stronger than those of most other rated U.S. airlines,” the agency said in a press release.

S&P said it sees Allegiant reporting a sizeable profit in 2021, albeit still below 2019 levels.

The outlook is stable.

S&P cuts Summit Midstream Partners

S&P said it cut Summit Midstream Partners LP’s issuer rating to SD from CC and its series A preferred units to D from C.

The downgrade follows the close of Summit’s series A preferred unit exchange, S&P said.

“We consider this a distressed transaction based on the discounted trading levels of the preferred units and because the preferred holders have received less than the original promise of the securities,” the agency said in a press release.

Holders will receive 30 common units for each preferred unit tendered. Holders tendered about $18.66 million of preferred units.

S&P ups Blue Racer notes

S&P said it upgraded Blue Racer Midstream LLC’s senior notes due in 2025, 2026 to B+ from B and revised its recovery rating to 3 (50%-70%; rounded estimate: 55%) from 5 (10%-30%; rounded estimate: 25%). The upgrade follows it reducing its revolving credit facility’s capacity to $750 million from $1 billion and repayment of the 2022 notes, the agency said.

The outlook is stable.

Moody’s ups Cleveland-Cliffs

Moody’s Investors Service said it upgraded Cleveland-Cliffs Inc.’s corporate family rating to B1 from B2, its probability of default rating to B1-PD from B2-PD, its guaranteed senior secured note rating to B1 from B2, its guaranteed senior unsecured note rating to B2 from B3 and its senior unsecured note rating to B3 from Caa1. The company’s speculative grade liquidity rating remains at SGL-2 and its outlook has been changed to positive from stable.

“The upgrade of Cleveland-Cliffs ratings reflects the materially improved steel sector fundamentals along with our expectation for material debt reduction in 2021, which will support a strong near term operating performance and sustainably stronger credit metrics,” said Michael Corelli, a Moody’s senior vice president and lead analyst for Cleveland-Cliffs, in a press release.

The positive outlook considers a significantly improved operating performance and substantial debt reduction in 2021, resulting in credit metrics that are strong for its rating, the agency said.

S&P boosts MEG Energy

S&P said it boosted MEG Energy Corp.’s issuer rating to B+ from CCC+ and its second-lien debt and senior unsecured debt to BB and BB-, respectively. The recovery ratings on the second-lien and senior unsecured debt are unchanged at 1 and 2, respectively.

“Having increased our 2021 and 2022 WTI price assumptions to $55 from $45, our projected annual funds from operations (FFO) for MEG Energy has increased by about 70% in 2021, and our updated projected 2022 FFO has doubled relative to our previous forecast (published in November 2020). Moreover, the projected improvement in our fully adjusted FFO-to-debt ratios for 2021 and 2022 is supported by the company’s reduced exposure to the Western Canadian Select (WCS) differential,” S&P said in a press release.

However, the agency noted MEG’s forecasted profitability remains constrained by the estimate of its total cost structure.

The outlook is stable.

Moody’s boosts Netflix

Moody’s Investors Service said it upgraded Netflix, Inc.’s corporate family rating to Ba1 from Ba3, probability of default rating to Ba1-PD from Ba2-PD and senior unsecured debt ratings to Ba1 from Ba3. Additionally, the agency kept Netflix’s speculative grade liquidity rating at SGL-1.

“The performance of Netflix in the second half of 2020 materially exceeded our forecasts at the time we placed a positive outlook on the ratings a year ago,” stated Neil Begley, a Moody’s senior vice president, in a press release.

The agency noted Netflix’s positive free cash flow, coupled with its debt issuance in 2020, bolstered the company’s already excellent liquidity and cash balance to about $8.2 billion at the end of 2020. Netflix’s leverage retreated to about 3.7x at the end of FY 2020 as its operating income grew 76% over FY 2019.

Moody’s said it sees Netflix’s leverage improving to below 3x by FY 2021.

The outlook remains positive.

Moody’s upgrades Vivent

Moody’s Investors Service said it upgraded APX Group, Inc.’s (Vivint) corporate family rating to B2 from B3 and its probability of default rating to B2-PD, from B3-PD.

Moody’s also raised Vivint’s first-lien senior secured debt, comprising a $943 million first-lien term loan and $1.502 billion of first-lien notes with varying maturities, to B2 from B3 and the rating on Vivint’s $400 million of senior unsecured notes due 2023 to Caa1 from Caa2.

The agency upgraded Vivint’s speculative grade liquidity rating to SGL-2 from SGL-3 and changed Vivint’s outlook to stable from negative, based on expectations for healthy revenue growth, strengthened liquidity and improving leverage.

“The upgrade to Vivint’s ratings reflects operational resilience in 2020, including solid revenue gains in the face of the Covid-19 pandemic, strongly positive free cash flow, and a sharply improved liquidity position. In contrast to Moody’s early-2020 expectations for Covid-induced difficulty in attracting new subscribers, elevated attrition and weakened revenue, Vivint for the full year delivered a 9% increase in both revenue and year-end subscriber count, while attrition improved by 150 basis points, to 12.4%,” the agency said in a press release.

Moody’s ups W&T Offshore

Moody’s Investors Service said it upgraded W&T Offshore, Inc.’s corporate family rating to Caa1 from Caa2, probability of default rating to Caa1-PD from Caa2-PD and senior secured second-lien notes rating to Caa2 from Caa3. The outlook was changed to stable from negative.

“The upgrade of W&T Offshore’s ratings reflects higher commodity prices that support continued positive free cash flow in 2021,” said Jonathan Teitel, a Moody’s analyst, in a press release. “Refinancing risks remain high but W&T will have stronger financial performance in 2021 than we were previously expecting to address its refinancing needs.”

Moody’s upgrades WireCo

Moody’s Investors Service said it upgraded WireCo WorldGroup Inc.’s corporate family rating to B3 from Caa1 and probability of default rating to B3-PD from Caa1-PD. Moody’s also upgraded the ratings on the company’s first-lien senior secured term loan to B3 from Caa1 and second-lien senior secured term loan to Caa2 from Caa3. The outlook was changed to stable from negative.

“WireCo’s end markets, buoyed by industrials, have gained positive momentum from the lows experienced by Covid in the first half of 2020. An improvement in industrial and infrastructure activity, increased fishing demand, and higher oil rig counts have led to a rebound in orders for the company’s broad portfolio of steel and synthetic rope, wire, and engineered products. Order intake momentum throughout 2021 and management’s renewed focus and continued execution of operating efficiencies will support better credit metrics,” the agency said in a press release.

Moody’s forecasts WireCo’s debt to EBITDA, inclusive of Moody’s adjustments, to improve to 6.1x and 5.7x at the end of 2021 and 2022, respectively.

The stable outlook reflects sustained momentum of improving market conditions and an expectation that it will successfully execute cost efficiencies and margin protection measures, the agency said.

S&P puts PPD on positive watch

S&P said it placed all its ratings for PPD Inc. and its rated subsidiaries on CreditWatch with positive implications.

The placement follows Thermo Fisher Scientific Inc. reporting its plan to acquire the company, the agency said.

“We expect to resolve the CreditWatch placement once the transaction closes. At the time, we could raise, withdraw, or discontinue our issuer credit and issue-level ratings on the company,” S&P said in a press release.

Moody’s shifts Carnival view to negative

Moody’s Investors Service said it revised Carnival Corp.’s outlook to negative from under review, which the agency started on Feb. 10 and ended with this rating action.

“The negative outlook reflects Carnival’s very high leverage, the continued uncertainty around the resumption of U.S. cruise operations and the pace and level of recovery in demand that will enable the company to significantly reduce leverage,” Moody’s said in a press release.

Concurrently, the agency confirmed Carnival’s B1 corporate family rating, B1-PD probability of default, Ba2 senior secured bank credit facility and senior secured note rating, B1 senior secured second lien rating and B2 senior unsecured rating. Moody’s left the SGL-2 speculative grade liquidity rating unchanged.

Moody’s turns Chromaflo view to negative

Moody’s Investors Service said it changed the ASP Chromaflo Holdings II, LP’s (Chromaflo) outlook to negative from stable.

“The change in outlook to negative reflects Chromaflo’s higher debt leverage after the proposed issuance of $145 million in second-lien debt to facilitate dividends payment to its shareholders,” said Jiming Zou, a Moody’s vice president and lead analyst on Chromaflo, in a press release.

The agency said it projects Chromoflo’s adjusted debt/EBITDA will increase to mid-six times, up from 5.3x at the end of 2020.

Concurrently, Moody’s affirmed Chromaflo’s B2 corporate family rating, its B2-PD probability of default rating and the B2 ratings on the senior secured first-lien term loans and revolver under ASP Chromaflo Intermediate Holdings, Inc. and B2 first-lien term loan under ASP Chromaflo Dutch I BV.

Moody’s revises NCL view to negative

Moody’s Investors Service said it revised NCL Corp. Ltd.’s outlook to negative from under review, cut the speculative grade liquidity rating to SGL-3 from SGL-2 and confirmed its ratings, including the B1 senior secured bank facility and senior secured note rating as well as the Caa1 senior unsecured note rating.

These actions conclude the review started on Feb. 10 for NCL Corp., and on March 2 for NCL Finance Ltd.

“The negative outlook reflects NCL’s weak credit metrics, the continued uncertainty around the resumption of U.S. cruise operations and the pace and level of recovery in demand that will enable the company to reduce leverage,” the agency said in a press release.

The lower SGL-3 reflects the revised forecast of material cash burn in 2021 with some recovery in 2022, Moody’s said.

“NCL has adequate liquidity represented by its cash balances of $3.3 billion at the end of 2020. Assuming a continuation of its first-quarter cash burn of approximately $570 million, this cash balance is sufficient to cover another year of suspended operations,” Moody’s said.

S&P puts Rocket Software on watch

S&P said it placed Rocket Software Inc.’s ratings, including its B rating on its first-lien term loan and revolver and CCC+ senior unsecured notes rating, on CreditWatch with negative implications.

“The CreditWatch placement follows the announcement that Rocket Software has reached an agreement to acquire ASG Technologies. While we do not know the details of the capital structure, we believe that a portion of the acquisition will be funded with new debt given Rocket’s financial sponsor ownership. Rocket did a debt-funded acquisition in January 2021, which took leverage close to its downside trigger of low-7x leverage. If we believe this new debt-funded acquisition will cause Rocket to sustain leverage above our downside trigger, it could cause us to take a negative rating action,” S&P said in a press release.

The agency said it aims to resolve the CreditWatch once the deal closes.

Moody’s shifts Royal Caribbean view to negative

Moody’s Investors Service said it changed the outlooks of Royal Caribbean Cruises Ltd. and Silversea Cruise Finance Ltd., together Royal Caribbean, to negative from under review.

The agency concurrently confirmed the ratings, including its B1 corporate family rating, B1-PD probability of default rating, Ba2 senior secured rating and B2 senior unsecured and senior unsecured guaranteed rating. The company’s speculative grade liquidity rating of SGL-2 is unchanged.

These actions conclude the review started on Feb. 10, the agency said.

“The negative outlook reflects Royal Caribbean’s weak credit metrics, the continued uncertainty around the resumption of U.S. cruise operations and the pace and level of recovery in demand that will enable the company to reduce its leverage,” Moody’s said in a press release.

S&P turns Cheniere Energy view to positive

S&P said it revised Cheniere Energy Inc.’s outlook to positive from negative.

With eight of the nine trains in the Cheniere complex operational (five trains at Sabine Pass Liquification LLC and three trains at Cheniere Corpus Christi Holdings LLC) and train 6 at SPL expected to achieve substantial completion by the second half of 2022, the agency said it sees cash flow continuing to increase.

“Furthermore, based on operations to date as well as some de-bottlenecking efforts at SPL, CEI recently announced an increase in each train’s anticipated production capacity of approximately 12% to 4.9 – 5.1 million tonnes per annum (mtpa). We believe that this will lead to further increases in cash flow through both further contracts and lifting of merchant cargos when prices are appropriate,” S&P said in a press release.

The agency said it forecast leverage will be 4.5x-5x on a debt-to-EBITDA basis by 2023.

Concurrently, S&P affirmed Cheniere’s BB issuer rating, BBB- senior secured debt rating with a 1 (95%) recovery rating and BB rating on its senior unsecured debt with a 3 (65%) recovery rating.

Fitch revises J.D. Power view to positive

Fitch Ratings said it revised the outlook for Project Boost Purchaser LLC (J.D. Power) to positive from stable and affirmed its B- issuer rating and the BB-/RR1 ratings on the first-lien senior secured revolver and term loan. The agency also assigned a B- issuer rating to the parent and financial statement filer, Boost Parent, LP.

“The revised outlook reflects Fitch’s view that the auto end market the company serves has stabilized and has been improving since the trough of the coronavirus pandemic. Improved trends across its end markets should lead to better than projected fundamentals in the coming years,” the agency said in a press release.

Moody’s reviews IDH for upgrade

Moody’s Investors Service said it placed on review for upgrade the ratings of Turnstone Midco 2 Ltd. (IDH), including the Caa2-PD probability of default rating.

Concurrently, the agency also placed on review for upgrade the Caa2 ratings on the backed senior secured notes due 2022 and the Ca rating on the backed senior secured second-lien notes due 2023, both issued by IDH Finance plc, which is wholly-owned by IDH. Moody’s changed the outlook to under review from negative.

Moody’s said the review follows the announcement that IDH’s majority shareholders had reached a binding sale agreement with an entity controlled by a financial sponsor to sell 100% of the business.

“The review for possible upgrade reflects Moody’s expectation that the completion of the sale would result in the repayment of all the group’s outstanding debt. While it is known that the purchaser is a financial sponsor and therefore, it seems highly likely that a new levered capital structure would be put in place, the review for upgrade initiated by Moody’s reflects the rating agency’s view that IDH’s future capital structure will, in any event, be more sustainable and carry lower leverage than the existing one (based on the same EBITDA),” the agency said in a press release.

S&P revises Foot Locker view to stable

S&P said it revised Foot Locker Inc.’s outlook to stable from negative and affirmed its BB+ issuer rating.

“We expect Foot Locker to continue to generate good free operating cash flow (FOCF) and maintain strong credit metrics, following better-than-expected performance in fiscal 2020. We expect the company to return to growth in 2021 as the continued trend toward healthy and active lifestyles, the casualization of apparel, and the strength in basketball athletic footwear will continue to drive healthy consumer demand,” S&P said in a press release.

Moody’s revises Recess outlook to stable

Moody’s Investors Service said it changed Recess Holdings, Inc.’s outlook to stable from negative.

Concurrently, the agency affirmed Recess’ ratings, including its B3 corporate family rating, its B3-PD probability of default rating, B2 rating on the senior secured first-lien term loan due 2024 and the rating on its senior secured second-lien term loan due 2025 at Caa2.

“Today’s ratings affirmation and change to a stable outlook reflect the company’s better than anticipated revenue and EBITDA during a challenging fiscal 2020 that resulted in better than expected positive free cash flow and leverage that remains within Moody’s expectations for the ratings,” the agency said in a press release.

Moody’s rates Cimpress facility Ba3

Moody’s Investors Service said it assigned a Ba3 rating to Cimpress plc’s planned senior secured credit facility to be used for refinancing. Cimpress and its subsidiary Cimpress USA Inc. will issue the facility.

Concurrently, the agency affirmed Cimpress’ B1 corporate family rating, B1-PD probability of default rating and B3 senior unsecured rating.

“The company’s speculative grade liquidity rating was upgraded to SGL-1 from SGL-2 reflecting very good liquidity proforma for the refinancing, supported by high cash balance ($452 million proforma) and the proposed credit facility’s covenant-lite structure,” Moody’s said in a press release.

Cimpress plans to use the proceeds from its proposed $1.15 billion term loan to repay $260 million of revolver borrowings as of Dec. 31, repay its term loan A with $144 million outstanding as of Dec. 31, and repay $300 million of second-lien notes, with the remaining proceeds of about $400 million staying as cash on the balance sheet.

The outlooks at Cimpress and Cimpress USA remain stable.

Moody’s assigns Conga, facilities B3

Moody’s Investors Service said it assigned a B3 corporate family rating and a B3-PD probability of default rating to first-time issuer Apttus Corp. (Conga). Moody’s also gave a B3 rating to the proposed first-lien credit facilities.

“The B3 CFR reflects Conga’s high leverage at closing and size of the recent restructuring offset by its leading position as a provider of revenue operations software for enterprise customers. Conga’s credit profile is supported by its strong recognition in the Salesforce CRM ecosystem, as well as a strong historical relationship with Salesforce as a partner and reseller of key Conga products,” Moody’s said in a press release.

The new credit facilities will be used to refinance Conga’s debt and pay for related fees and expenses. Private equity firm Thoma Bravo owns Conga. Thoma Bravo raised the existing debt to acquire Apttus in 2018 and Conga in 2020. The company does business as Conga following the acquisition.

The outlook is positive, reflecting Conga’s growth potential and the significant progress in reducing its cost structure, which should significantly help EBITDA and free cash flow levels, the agency said.

S&P rates Conga, facilities B-

S&P said it rated Project Everest Ultimate Parent LLC (Conga) and its planned first-lien facilities B-. The company plans to secure a $565 million term loan and $50 million revolving credit facility to refinance its debt structure.

“The B- issuer credit rating reflects our expectation that Conga’s FCF to reported debt will be low, between 1% and 2% over the next 12 months, burdened by high acquisition-related one-time costs but improving as cost-saving goals are met. Apttus, controlled by private equity firm Thoma Bravo, bought a majority stake in the firm in May 2020, rebranding the merged entity Conga,” S&P said in a press release.

The outlook is stable. “The stable outlook reflects our expectation that Conga will increase revenue by the single-digit percent area and modestly raise its EBITDA base with the realization of cost synergies,” S&P said.

Moody’s assigns Coty notes B3

Moody’s Investors Service said it assigned a B3 rating to Coty Inc.’s proposed $750 million of senior first-lien secured five-year notes.

Concurrently, Moody’s changed Coty’s rating outlook to stable from negative and affirmed the company’s Caa1 corporate family rating and its Caa1-PD probability of default rating. Moody’s also affirmed Coty’s senior secured credit facility ratings, including its first-lien revolving credit facility at B3 and its first-lien term loan at B3, and also affirmed Coty’s Caa3 senior unsecured notes rating. Coty’s SGL-4 Speculative Grade Liquidity Rating remains unchanged.

Proceeds will be used to repay a portion of Coty’s $1.9 billion outstanding term loan A due 2023 and pay $13 million of fees and expenses.

Moody’s said it changed the outlook because it expects Coty will continue improving credit metrics over the next 12-to-18 months through an ongoing recovery in earnings from the weakness suffered during the coronavirus downturn.

Moody’s assigns Mitratech B3

Moody’s Investors Service said it assigned first-time ratings to Maverick Bidco, Inc. (Mitratech), including a B3 corporate family rating, B3-PD probability of default rating and B2 debt instrument ratings on the company’s proposed first-lien credit facility consisting of a $40 million revolver due 2026 (undrawn at close), $445 million term loan due 2028, and $75 million delayed drawn term loan (undrawn at close).

Moody’s also assigned a Caa2 debt instrument rating on the proposed $185 million second-lien term loan due 2029. The outlook is stable.

The B3 CFR reflects Mitratech’s 9.7x debt/EBITDA, pro forma for the proposed capital structure and two acquisitions under letters of intent and excluding actioned but unrealized synergies, or 9x when viewed on a cash EBITDA basis by adding back the change in deferred revenue to EBITDA. The rating also considers the company’s small scale with pro forma revenue of about $160 million and a relatively narrow product focus within legal and compliance services and solutions, Moody’s explained.

Proceeds from the two term loans will be used with new cash equity and rollover of equity to support Ontario Teachers’ Pension Plan Board’s acquisition of Mitratech, fund the acquisition of two entities currently under letters of intent, expected to close simultaneously with OTPP’s acquisition of Mitratech, and add $20 million of cash on the balance sheet. Owner Hg Capital and management will retain a minority ownership position in the new company.

The outlook is stable. The outlook reflects an expectation for low single-digit revenue growth and modest deleveraging as EBITDA growth is achieved by realizing synergies and organic performance, the agency said.

S&P rates Mitratech B-

S&P said it gave Maverick Holdco Inc. (Mitratech) a B- issuer rating. The plans to secure a $40 million first-lien revolving credit facility, a $445 million first-lien term loan, a $75 million delayed draw first-lien tranche (undrawn at close) and a $185 million second-lien term loan to partially fund its leveraged buyout by Ontario Teachers’ Pension Plan Board.

The agency assigned B- and 3 recovery ratings to the first-lien debt and CCC and 6 recovery ratings to the second-lien loan.

“We forecast Mitratech’s adjusted leverage will remain elevated in the mid-10x area in fiscal 2022, with the risk of re-leveraging through debt-financed acquisitions. Our ratings on Mitratech reflect elevated adjusted leverage in the high-10x area pro forma for the transaction, and we expect modest deleveraging to the mid-10x area in fiscal 2022 (year-end Jan. 31, 2022),” S&P said in a press release.

The outlook is stable.

Moody’s eyes Bally’s for upgrade

Moody’s Investors Service placed Bally’s Corp.’s B2 corporate family rating on review for upgrade along with its B2-PD probability of default rating, Ba3 senior secured revolver and term loan ratings and Caa1 senior unsecured rating.

The review follows Bally’s announcement it agreed to acquire Gamesys Group plc, Moody’s said.

“In the review for upgrade, Moody’s will evaluate the strategic and operating benefits to Bally’s from the merger including Gamesys’ technology platform and expertise with respect to online gaming. The merger will enable Bally’s to capitalize on the full range of gaming opportunities available both in the U.S. and beyond as it broadens the company’s revenue streams and enables it to quickly enter new and evolving gaming environments,” the agency said in a press release.

Fitch gives Conga B+, loans BB

Fitch Ratings said it assigned Project Everest Ultimate Parent, LLC (Conga) and Apttus Corp. a first-time B+ long-term issuer default rating. Also, Fitch gave a BB/RR2 rating to Apttus’ $50 million secured revolving credit facility and $565 million first-lien secured term loan.

“Conga’s B+ long-term IDR is supported by recurring sales with high retention and strong cash-generative qualities. The IDR also reflects the company’s higher-quality customer base, with the majority of sales coming from larger enterprises. As a private equity-owned entity, financial leverage is likely to remain at moderate levels as shareholders prioritize ROE optimization, limiting debt reduction. Fitch expects Conga to delever modestly, mainly through EBITDA growth, and to maintain leverage within a range consistent with B+ rated software peers,” the agency said in a press release.

The proceeds will be used to refinance the company’s credit facility.

The outlook is stable.

Moody’s gives CoreLogic notes B1

Moody’s Investors Service said it assigned a B1 rating to CoreLogic, Inc.’s $750 million of senior secured notes due 2028.

The proceeds, along with previously rated debt and equity from affiliates of Stone Point Capital LLC and Insight Partners, will fund the acquisition of 100% of CoreLogic’s common stock in a go-private transaction, as well as pay related fees and expenses, the agency said.

“The addition of the secured note will add another debt funding source for CoreLogic, and the fixed-rate note will lower exposure to floating interest rate risk, which are positive credit developments,” said Edmond DeForest, a Moody’s vice president, in a press release.

“However, these benefits are mitigated by what is likely to be a higher interest rate on the note than the term loan it replaces,” DeForest added.

S&P gives Coty notes B

S&P said it assigned its B issue-level rating and 2 recovery rating to Coty Inc.’s proposed $750 million of senior secured notes due 2026. The 2 recovery rating indicates an expectation for substantial (70%-90%; rounded estimate: 80%) recovery in default.

The company intends to use the proceeds to repay a portion of its term loan A facility due 2023.

“All of our other ratings on Coty, including our B- issuer credit rating and negative outlook, are unaffected by this transaction, which we expect will be net-leverage-neutral,” S&P said in a press release.

Moody’s eyes CSM Bakery for upgrade

Moody’s Investors Service said it placed CSM Bakery Solutions LLC’s Caa2 corporate family rating, Caa2-PD probability of default rating, Caa1 senior secured first-lien term loan rating and Caa3 senior secured second-lien term loan ratings under review for upgrade. Before the review, the outlook was stable.

The review follows CSM’s planned divestiture of its European and international ingredients division to Investindustrial for about €650 million. At the close, CSM will receive about €416 million in cash proceeds, after transaction expenses and separation costs. It will use about €400 million to repay the entire balance of its first-lien term loan.

The divested European ingredients business will also assume about €150 million in pension obligations, net of deferred tax assets. At the transaction’s close, CSM Bakery Solutions will have about $264 million in debt outstanding.

“The review will focus on the financial metrics that will result from the divestiture and subsequent repayment of the $453.5 million senior secured first-lien term loan, including anticipated lower leverage, pro forma cash flow and liquidity. In addition, the review will also focus on the company’s plans to refinance its $100 million ABL revolver due October 2021,” Moody’s said in a press release.

Moody’s eyes Grab for upgrade

Moody’s Investors Service said it placed Grab Holdings Inc.’s ratings under review for upgrade, including the B3 rating on its senior secured term loan. Grab and its wholly-owned subsidiary, Grab Technology LLC, are the borrowers. The loan is guaranteed by subsidiaries engaged in transport, food and delivery services.

The agency changed the outlook under review from stable.

The review follows Grab’s Tuesday announcement it agreed to merge with Altimeter Growth Corp., a special purpose acquisition company, that will result in Grab’s public listing on the Nasdaq, the agency said.

“Grab’s public listing will add $4.0-$4.5 billion of liquidity buffer upon successful completion, which will support the company’s growth plans,” said Stephanie Cheong, a Moody’s analyst, in a press release. “More importantly, all of Grab’s convertible redeemable preference shares will convert into equity upon listing, thereby eliminating the redemption risk associated with these shares, which currently weighs on the company’s credit profile.”

Fitch puts Dell Technologies on positive watch

Fitch Ratings said it placed Dell Technologies, Inc.’s and its subsidiaries’ ratings, including its BB+ long-term issuer default rating on watch positive.

The placement follows Dell’s announcement it will spin-off its 81%-ownership stake in VMware Inc. The transaction will take the form of a tax-free spinoff and is targeted to close in the fourth fiscal quarter of f2021.

“At or near the transaction close, Fitch anticipates upgrading Dell’s ratings to BBB, absent the company falling meaningfully short of its organic debt reduction targets through the first three quarters of fiscal 2022. Fitch believes Dell’s operating profile supports a low- to mid-BBB rating with scale-based competitive advantages expected to drive continued share gains and its large diversified installed base moderating customer infrastructure spending volatility,” Fitch said in a press release.

Fitch puts VMware on positive watch

Fitch Ratings said it placed VMware, Inc.’s ratings, including the BB+ issuer default rating and BBB-/RR2 senior unsecured ratings, on rating watch positive following Dell Technologies, Inc.’s announcement it will spin off its 81% ownership of VMware.

The transaction will take the form of a tax-free spinoff and is targeted to close in the fourth calendar quarter of 2021.

“At or near transaction close, Fitch anticipates upgrading VMware’s IDR and senior unsecured ratings to BBB, absent a material weakening of the pro forma financial profile. Fitch believes VMware’s operating profile supports at least a high BBB with technology leadership and diversification in secular growth markets offset by robust competition from partners with greater financial flexibility,” Fitch said in a press release.

S&P puts Weingarten on positive watch

S&P said it placed Weingarten Realty Investors’ ratings, including the BBB issuer rating, on CreditWatch with positive implications.

The placement follows the announcement Weingarten agreed to be acquired by Kimco Realty Corp., the agency said.

“The CreditWatch with positive implications reflects our view that Houston-based Weingarten will benefit from greater scale as a result of the acquisition by Kimco, promoting enhanced cost and leasing efficiencies above what Weingarten could achieve on a stand-alone basis. The transaction is anticipated to close in the second or third quarter of 2021,” S&P said in a press release.

The agency said it aims to resolve the CreditWatch after Kimco closes the deal.

Moody’s reviews Dell for upgrade

Moody’s Investors Service said it placed Dell, Inc.’s ratings, including the senior unsecured debt ratings of Dell and its subsidiaries on review for upgrade.

Moody’s affirmed the Baa3 ratings on the senior secured debt at Dell International LLC and EMC Corp. Dell is a wholly-owned indirect subsidiary of Dell Technologies Inc.

The review was prompted by the announcement by Dell and its majority-owned subsidiary VMware, Inc., that VMware will pay a special cash dividend of $11.5 billion to $12 billion to its shareholders in conjunction with Dell’s plans to distribute its about 81% ownership interest in VMware to Dell shareholders, Moody’s said.

Dell plans to use the $9.3 billion to $9.7 billion of its share of the special dividend proceeds to slash its debt. The debt reduction coupled with Dell’s previously announced plans to repay at least $5 billion of debt during the fiscal year ending January 2022 would significantly accelerate its deleveraging, the agency noted.

Pro forma for the separation from VMware and debt repayments, Moody’s said it forecasts Dell’s total debt to EBITDA, incorporating Moody’s standard analytical adjustments, would decline to 2.6x from 4.4x at FYE ’21.

Moody’s said it expects Dell to continue using a substantial share of its excess cash and free cash flow over the following 12 to 18 months to reduce further debt consistent with its target of 1.5x gross “core” leverage.

Moody’s reviews VMware for downgrade

Moody’s Investors Service said it placed VMware, Inc.’s Baa2 senior unsecured rating under review for downgrade following the announcement it will pay a special cash dividend of $11.5 billion to $12 billion in conjunction with Dell Technologies Inc.’s plans to distribute its about 81% ownership interest to its shareholders. The agency changed the outlook to under review from stable.

VMware intends to finance the dividend with incremental debt and $2.5 billion to $3.5 billion of cash on hand. Pro forma for the debt raise, Moody’s said it estimates VMware’s total debt to EBITDA (Moody’s adjusted) will increase to around 5x (Moody’s adjusted). VMware plans to use its free cash flow to reduce debt for two years after the payment.

The review will focus on VMware’s cash balances and debt capital structure after the spinoff, Moody’s assessment of VMware’s debt reduction plans after the dividend and the agency’s understanding of commercial agreement risks between Dell and VMware after their separation.

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