Moody’s downgrades BW NHHC

Moody’s Investors Service said it downgraded BW NHHC Holdco’s (dba Elara Caring) corporate family rating to Caa2 from Caa1, and its probability of default rating to Caa2-PD/LD from Caa1-PD. Moody’s also downgraded the first-lien senior secured credit facility ratings to Caa1 from B3, and the second-lien secured term loan rating to Ca from Caa3.

Moody’s added an /LD designation to Elara’s Caa2-PD probability of default rating to reflect a limited default resulting from its recently completed debt exchange, which will be removed after three business days. The outlook is stable. The downgrades conclude the review of Elara’s ratings initiated on Nov. 26.

The downgrade reflects the significant erosion of operating performance and liquidity in Elara Caring’s recent financial results. The company has faced challenges integrating multiple legacy businesses following the merger of Great Lakes and Jordan Health in 2018.

On Dec. 30, Elara Caring exchanged most if its second-lien term loan for a new junior-lien PIK loan (unrated). Moody’s considered this transaction to be a distressed exchange, which is a default under the rating agency’s definition. These transactions do not constitute an event of default under any of the company’s debt agreements.

S&P cuts GIP III Stetson I, Stetson II

S&P said it cut its issuer credit rating on GIP III Stetson I LP and GIP III Stetson II LP to B from B+ and the issue-level rating to B from B+. The 3 recovery rating on the $1 billion term loan B due 2025 indicates S&P’s expectation lenders will receive meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a payment default.

“The downgrade is driven by our expectations that leverage will remain above 4x for the next two years due to EnLink Midstream, LLC’s announcement that it will cut its distribution by nearly 35% to $0.75 per unit annually from our previous expectation of about $1.13 per unit annually,” said S&P in a press release.

The outlook is stable.

Moody’s ups VICI, rates notes Ba3, view to stable

Moody’s Investors Service said it upgraded the senior unsecured debt rating of VICI Properties LP to Ba3 from B1 and assigned a Ba3 rating to VICI’s $2.5 billion senior unsecured notes currently being marketed and affirmed its corporate family rating at Ba3. The agency also upgraded all the ratings of VICI’s wholly-owned subsidiary, VICI Properties 1 LLC, including the senior secured credit facilities to Ba2 from Ba3 and its second-lien notes to Ba3 from B1.

Proceeds will be used primarily to fund the previously announced Eldorado acquisition and the remainder to refinance the $498.5 million second-lien notes.

The rating upgrade reflects VICI’s capital mix shift to mostly unsecured debt in its capital structure with the proposed offering of up to $2.5 billion of unsecured bonds.

Moody’s revised the outlook to stable from positive.

Moody’s ups Switch

Moody’s Investors Service said it upgraded Switch, Ltd.’s corporate family rating to Ba3 from B1, its probability of default rating to Ba3-PD from B1-PD and its senior secured bank credit facility rating to Ba3 from B1. Switch’s speculative grade liquidity rating is maintained at SGL-2.

Switch’s outlook remains positive based on the company’s solid financial position and growth upside from data center builds and continued expansion within the company’s four U.S. regional markets, Moody’s said.

The upgrade reflects Moody’s projections of strong financial performance supported by solid colocation and connectivity growth, with revenue at both segments growing in excess of about 13% in the third quarter of 2019 compared to the same period in 2018. Moody’s said it expects full-year revenue growth of around 12% for 2019 with increasing demand driving higher growth in 2020 from facility and market expansions, including the commercial launch of operations in the company’s newest regional campus in Atlanta.

Moody’s changes Europcar view to negative

Moody’s Investors Service said it changed the outlook for Europcar Mobility Group and the rating on EC Finance plc’s notes to negative from under review. Moody’s started a review on Oct. 29.

“The negative outlook on EMG’s ratings reflects the risk that its credit metrics, notably Moody’s-adjusted debt/EBITDA and EBIT/Interest of around 5.1x and 1.2x respectively at year-end 2019 based on our estimates, will remain weak for the current B1 CFR over the next 12-18 months if continued soft market conditions lead to sustained market fleet overcapacity and price pressure,” said Eric Kang, Moody’s lead analyst for EMG, in a press release. “That said, we expect the company to be able to adjust in a timely manner its fleet size to protect utilization rates in the event of a material fall in demand thanks to the flexibility provided by the use of buyback and operating leases financings.”

Moody’s also confirmed Europcar’s ratings including the corporate family rating of B1 and the probability of default rating of B1-PD. Concurrently, Moody’s confirmed the B3 ratings on the senior unsecured notes due 2024 and 2026 at Europcar and the B1 rating on the senior secured notes at EC Finance.

Moody’s changes Sisaho view to negative

Moody’s Investors Service said it affirmed the B2 corporate family rating of Sisaho International SAS, the B2 senior secured debt rating and changed the outlook on Sisaho to negative from stable.

The change in outlook to negative from stable reflects a slower reduction in leverage than Moody’s expected at the time of the sale of Sisaho to Charterhouse Capital Partners and Siaci Saint Honore’s management 18 months ago and the risk that leverage remains above Moody’s expectations for Sisaho’s current rating level for a prolonged period.

S&P puts Wesco on watch

S&P said it placed all its ratings, including the BB issuer credit ratings on Wesco International Inc. and its subsidiary Wesco Distribution Inc. on CreditWatch with negative implications.

The placement follows the announcement Wesco plans to acquire Anixter International Inc. with a mix of debt, equity-content securities, preferred shares and common stock.

“The CreditWatch negative placement reflects our expectation that, despite a substantial increase in scale, Wesco’s credit ratios will deteriorate significantly following the close of its acquisition of Anixter. We do not yet know the terms of the expected equity-content securities issuance, which will inform our S&P Global Ratings’ adjusted leverage forecast,” said S&P in a press release.

Moody’s assigns Albertsons notes B2, view to positive

Moody’s Investors Service said it assigned a B2 rating to Albertsons Cos., Inc.’s proposed new senior unsecured notes. Moody’s also affirmed the company’s B1 corporate family rating and B1-PD probability of default rating and upgraded the rating of Albertsons and Safeway Inc.’s senior unsecured notes to B2 from B3. The company’s speculative grade liquidity rating is unchanged at SGL-1. The outlook is changed to positive from stable reflecting Moody’s expectation the company will continue to cut its debt and improve profitability.

The proceeds will be used to pay off Albertson’s LLC’s senior secured term loans. The ratings on these term loans will be withdrawn when the transaction closes.

“Albertsons has demonstrated improvement in operating performance, increasing top line and profitability in a highly competitive and promotional pricing environment in the food retailing industry,” said Mickey Chadha, a Moody’s vice president stated. “The company has also reduced a significant amount of debt thereby improving credit metrics.”

S&P revises BJ’s Wholesale view to positive

S&P revised the outlook for BJ’s Wholesale Club Holdings Inc. to positive from stable and affirmed the company’s B+ rating.

“The positive outlook reflects our belief that BJ’s will maintain its good operating performance because of management’s strategic initiatives, including disciplined cost and inventory management and investments in its omni-channel and customer engagement. We also believe the company’s recently announced financial policy will likely support deleveraging over the next 12 months through both EBITDA growth and debt repayment,” said S&P in a press release.

The agency also affirmed the BB- issue-level rating on the company’s term loan. The 2 recovery rating remains unchanged, indicating an expectation for substantial recovery (70%-90%; rounded estimate: 80%) in the event of a payment default.

S&P shifts Corus view to stable

S&P said it revised the outlook for Corus Entertainment Inc. to stable from negative.

“The outlook revision reflects our view that the company’s debt repayment plans, spurred by its ability to generate meaningful discretionary cash flow (DCF), should lead to improved credit measures over the next 12 months, while Corus pursues an operational turnaround amid structural changes in the underlying industry. We believe the lower leverage (about 3.2x at fiscal 2021 from 3.7x in fiscal 2018) mitigates risks related to the company’s plans to address uneven revenue growth at Corus’ legacy media segments,” said S&P in a press release.

S&P affirmed the company’s BB long-term issuer credit rating on the company, and the BB+ issue-level rating, with a 2 recovery rating, on Corus’ senior secured debt.

Moody’s changes Nexi view to stable

Moody’s Investors Service said it changed the outlook for Nexi SpA to stable from positive.

The change in outlook to stable from positive, reflects the significant increase in Moody’s adjusted (gross) leverage that is expected to occur following the fully debt-funded acquisition of Intesa Sanpaolo’s merchant acquiring business.

Nexi also announced it secured €1 billion of bridge financing to fund the transaction, which management intends to primarily refinance via the capital markets.

Moody’s affirmed Nexi’s Ba3 rating and Ba3-PD probability of default rating as well as the Ba3 rating on Nexi’s €825 million senior unsecured notes due 2024.

Fitch assigns Aernnova loan BB

Fitch Ratings said it assigned a BB/RR2 rating to Aernnova Aerospace’s €490 million seven-year term loan and a B+ rating to the company.

“The rating is supported by the group’s high and stable cash flow generation, leading position in the aerostructures market, moderate program diversification, including presence on some successful aircraft program such as the A350 and A320, and a long-term relationship with its chief customer, Airbus,” said Fitch in a press release.

The outlook is stable.

Fitch assigns AI Convoy loan B+

Fitch Ratings said it assigned an expected B+/RR3 to AI Convoy (Luxembourg) Sarl’s proposed €885 million and $1.188 billion first-lien senior secured debt. Fitch also assigned an expected rating of B to the company.

The company is the borrower and owner of U.K.-based aerospace and defense contractor, Cobham. “The ratings reflect the company’s moderate business profile, characterized by good product, customer and geographical diversification, a long history of development of high tech products for the aerospace and defense industry as well as exposure to end-markets with good underlying demand dynamics,” said Fitch in a press release.

The outlook is stable.

Moody’s rates AI Convoy loan B1

Moody’s Investors Service said it assigned B1 ratings to the senior secured first-lien term loan B due 2027, split into a $788 million and a €885 million tranches, and the $350 million equivalent senior secured first-lien revolving credit facility due 2025 issued by AI Convoy (Luxembourg) Sarl. The outlook on the company is stable.

The proceeds of the debt financing, alongside new equity, will be used to finance of the acquisition of Cobham by AI Convoy, refinance existing debt for working capital and pay transaction fees and expenses. The transaction closed on Friday and Cobham Plc was delisted on Monday.

Moody’s also assigned a B2 corporate family rating and B2-PD probability of default rating to AI Convoy a holding company formed to effect the acquisition of Cobham by funds managed by Advent International.

Fitch rates AI Convoy loan B+

Fitch Ratings said it assigned an expected B+/RR3 rating AI Convoy (Luxembourg) Sarl’s proposed €885 million and $1.188 billion first-lien senior secured debt. The outlook is stable.

The agency also assigned a B rating to the company, which owns U.K.-based Cobham.

“The ratings reflect the company’s moderate business profile, characterized by good product, customer and geographical diversification, a long history of development of high tech products for the aerospace and defense industry as well as exposure to end-markets with good underlying demand dynamics,” said Fitch in a press release.

S&P assigns Albertsons notes BB-

S&P said it assigned its BB- issue-level rating and 2 recovery rating to Albertsons Cos. Inc.’s proposed new senior unsecured notes.

In total, the notes consist of $2.35 billion due in 2023, 2030, and an add-on to the existing 2027 notes. The 2 recovery rating indicates S&P’s expectation for substantial recovery to lenders (70%-90%; rounded estimate: 85%).

Proceeds will be used to repay nearly $760 million in term loan B-7 and $1.6 billion in term loan B-8 debt, eliminating its secured term loan debt. The refinancing is leverage neutral and extends the company’s overall debt maturity profile. It also moves it to a fully unsecured capital structure (excluding the ABL revolver), S&P said.

The B+ issuer credit rating on the company and all other issue-level ratings are unchanged.

S&P assigns Armacell loan B

S&P said it assigned B ratings to Neptune Holdco Sarl and its proposed term loan, which will be used by PAI Partners and Kirkbi to buy Armacell from Blackstone and repay debt.

The financing package includes a €710 million senior secured term loan B due 2027 (to be co-borrowed by financing subsidiaries Neptune Bidco Sarl and Neptune US Bidco Inc.) and a €110 million senior secured revolver due 2026, which will be used to repay Armacell’s term loan due 2023. There’s about €610 million outstanding on Armacell’s loan.

PAI and Kirkbi will provide €594 million of equity including about €75 million of preferred equity certificates, which S&P views as equity. Post transaction, the capital structure will also include about €48 million of operating-lease liabilities and €38 million of other bank debt rolled over at various operating subsidiaries.

“We anticipate pro forma adjusted debt to EBITDA of about 7x in 2019, reflecting the new capital structure, improving toward 6.5x in 2020,” S&P said in a press release.

S&P rates Banijay debt B, CCC+

S&P said it assigned a B rating to Banijay Group SAS’ proposed senior secured instruments and a CCC+ rating to the proposed senior notes.

Banijay plans to use new debt to refinance its current capital structure and to pay for the acquisition of Endemol Shine Group. Banijay will also receive an equity injection from its main shareholders to partly fund the deal.

S&P’s ratings on Banijay, including the B+ issuer credit rating and issue level ratings, will remain on CreditWatch with negative implications until the acquisition closes.

“We expect that, pro forma the acquisition, Banijay’s adjusted leverage in 2020-2022 will exceed 5x. For this reason, we expect to lower our issuer credit rating on Banijay by one notch to B once the transaction closes,” S&P said in a press release.

Moody’s assigns Baytex notes B2

Moody’s Investors Service said it assigned a B2 rating to Baytex Energy Corp.’s proposed $500 million senior unsecured notes offering due 2027. The proceeds will be used to refinance all the $400 million notes due June 2021 and C$120 million of the C$300 million notes due July 2022. Concurrently, the company will repay the remaining C$180 million of its July 2022 notes with room under its $575 million credit facility.

“Baytex’s refinancing is credit positive since it materially extends the company’s maturity profile and provides the company greater financial flexibility,” said Moody’s analyst Jonathan Reid, in a press release.

S&P rates Biscuit debt B, CCC+

S&P said it assigned a preliminary B rating to Biscuit International’s proposed €490 million term loan B (TLB) and a preliminary CCC+ issue rating to the company’s proposed €110 million second-lien instrument, which will be used to buy the company. The respective preliminary recovery ratings are 3, indicating an estimate of 50% recovery prospects, and, indicating an estimate of 0% recovery prospects. S&P also assigned a preliminary B rating to the company.

Post-closing of the leveraged buyout transaction, Biscuit will have a highly leveraged capital structure with debt to EBITDA reaching 7.2x, as adjusted by S&P Global Ratings. Cookie Acquisition SAS (Biscuit International) was acquired by private equity fund Platinum Equity through a mix of bank debt (split between a €490 million of term loan with a seven-year maturity and a €110 million second-lien instrument with an eight-year maturity) and pure equity, the agency said.

Biscuit International’s adjusted debt to EBITDA will reach 7.2x. “We consider this level of leverage to be aggressive but still commensurate with our B rating level,” S&P said in a press release.

Moody’s rates Cookie loan B2

Moody’s Investors Service said it assigned a B2 rating to the €490 million first-lien senior secured term loan B due 2027 and to the €85 million revolving credit facility due 2026 to be borrowed by Cookie Acquisition SAS and a Caa2 rating to the €110 million second-lien senior secured term loan due 2028 to be borrowed by Cookie Acquisition. The outlook is stable.

The company is being used to acquire Biscuit International. Moody’s assigned a first-time B3 corporate family rating and a B3-PD probability of default rating to Cookie Intermediate Holding II SAS, the parent company of Biscuit International.

“Cookie Intermediate’s B3 rating reflects its strong position in the European private label sweet biscuit market, its high operating margins, a degree of geographic diversification across Europe and the historical resilience of the European sweet biscuit market,” Paolo Leschiutta, a Moody’s senior vice president and lead analyst for Biscuit International, in a press release.

“The rating, however, also reflects the company’s high initial financial leverage of 7.6x, on a Moody’s adjusted gross debt to EBITDA basis, which will reduce towards 6.5x by the end of 2021, its selected product focus and relatively small absolute scale, some execution risk on the capability to deliver on the cost optimization plan, a track record of acquisitions and the low growth of the sweet biscuit market across Europe,” added Leschiutta.

S&P assigns Holly notes BB

S&P said it assigned its BB issue-level and 5 recovery ratings to Holly Energy Partners LP’s proposed $500 million senior unsecured notes due 2028. The 5 recovery rating indicates an expectation of modest (10%-30%; rounded estimate: 25%) recovery in the event of a default.

The partnership intends to use the net proceeds to refinance the $500 million worth of senior notes due 2024. As of Sept. 30, Holly had about $1.4 billion of debt outstanding.

Moody’s assigns Jane Street Ba2

Moody’s Investors Service said it assigned a Ba2 corporate family rating to Jane Street Group, LLC and affirmed its Ba3 senior secured first-lien term loan. The outlook remains stable.

Moody’s said the Ba2 rating reflects Jane Street’s highly profitable credit profile and its strong level of retained capital. Jane Street’s partnership-like culture and key executives’ high level of involvement in control and management oversight provides an effective risk management framework, the agency said.

Moody’s assigns Lamar facility Baa3

Moody’s Investors Service said it assigned a Baa3 rating to Lamar Media Corp.’s proposed senior secured credit facility (consisting of a $750 million revolver and $600 million term loan B). Moody’s affirmed the Ba2 rating on the senior unsecured notes and Ba3 rating on the senior subordinated notes. The outlook remains stable.

The new revolver due 2025 will be increased to $750 million from $550 million and is expected to have about $140 million drawn pro forma for the transaction. The new $600 million term loan B due 2027 refinances the term loan B. The term loan A is expected to be refinanced with additional unsecured debt in the near term.

Pro forma leverage is expected to remain at 4.1x as of 2019’s third quarter (excluding Moody’s standard adjustments for lease expenses). The transaction extends the maturity date of its secured credit facility, lowers interest expense and reduces the amount of required amortization payment following the repayment of the term loan A and the lack of required amortization payment on the new term loan B.

The ratings on the outstanding senior secured debt (including the revolver, term loan A and B) will be withdrawn after repayment.

S&P rates Lamar loan BBB-

S&P said it assigned its BBB- issue-level and 1 recovery ratings to the proposed $600 million senior secured term loan issued by Lamar Media Corp., a subsidiary of Lamar Advertising Co. The 1 recovery rating indicates an expectation for very high (90%-100%; rounded estimate: 95%) recovery for lenders in the event of a payment default.

Lamar plans to use the proceeds from the proposed debt to refinance its outstanding senior secured term loan B ($591 million outstanding). “The transaction does not affect our BB issuer credit rating or stable outlook on Lamar because it is roughly leverage neutral,” S&P said in a press release.

S&P assigns MEIF 5 notes BB

S&P said it assigned a BB rating with a recovery rating of 4 to MEIF 5 Arena Holdings’ planned €575 million of senior secured notes to refinance debt and pay about €90 million in distributions to its shareholders.

“In our view, the proposed refinancing will reduce MEIF 5’s already limited rating headroom, since it will increase the company’s debt burden despite the increase in maturity and lower cost of debt. The proposed refinancing includes €575 million of senior secured notes (to be split between fixed-rate and floating-rate tranches) as well as a new revolving credit facility (RCF), which has increased to €100 million from €75 million. Notably, the transaction will lead to an increase in adjusted debt to EBITDA to 7.7x in 2020 from our 2019 expectation of 7.5x for the 2018-2020 period,” said S&P in a press release.

S&P affirmed its BB rating on MEIF 5. The outlook is stable.

Fitch rates VICI notes BB

Fitch Ratings said it assigned BB/RR4 ratings to VICI Properties LP’s proposed senior unsecured notes, which is a subsidiary of VICI Properties Inc. The long-term issuer default rating for VICI LP, VICI and VICI Properties 1 LLC is BB. The outlook is stable.

The senior unsecured notes are being issued in three tranches, maturing 2025, 2027, and 2030. The proceeds will be used to redeem $498 million of VICI’s outstanding second-lien notes and to fund $3.2 billion of transactions associated with the Eldorado Resorts, Inc. and Caesars Entertainment Corp. merger. VICI will also use $1.3 billion of equity proceeds, which were raised through forward agreements as part of a larger $2.5 billion equity offering in June 2019.

The debt proceeds not used for the second-lien redemption will be kept in escrow until the merger between Caesars and Eldorado finalizes.

S&P assigns Reynolds loan BB+

S&P said it assigned a preliminary BB+ with a 2 recovery rating to Reynolds Consumer Products Inc.’s proposed $2.725 billion secured bank credit facility. The 2 recovery rating indicates creditors could expect substantial (70%-90%; rounded estimate: 70%) recovery in the event of a payment default.

Reynolds Consumer announced plans to complete an initial public offering and enter a $2.725 billion secured bank credit facility. The aggregate net proceeds of which will be distributed to Reynolds Group Holdings Ltd.

S&P also assigned a preliminary BB rating to Reynolds. “RCPI has strong market shares in low-growth but stable categories. Its portfolio is characterized by products with very high consumer awareness and the number one or two position in their respective categories, which in aggregate total more than $9 billion at retail. In particular, the Reynolds cooking and baking unit holds more than 50% market share in foil, bakeware and cooking accessories (a strong majority of which is generated from branded product sales),” said S&P in a press release.

The outlook is stable.

S&P rates SBA notes BB-

S&P said it assigned its BB- issue-level rating and 5 recovery rating to SBA Communications Corp.’s proposed $750 million senior unsecured notes due 2027. The 5 recovery rating indicates S&P’s expectation for modest (10%-30%; rounded estimate: 10%) recovery in the event of a payment default. The company will use the proceeds to redeem the $750 million of its 4.875% senior unsecured notes due 2022 that remain outstanding.

Because the transaction will not materially affect the company’s credit metrics, S&P’s BB issuer credit rating and stable outlook on SBA Communications remain unchanged, the agency said.

Absent a revision to the company’s financial policies, which include shareholder distributions, stock buybacks and a stated net leverage target of 7x-7.5x, S&P said it expects its adjusted debt to EBITDA to remain elevated at about 8x (including adjustments for operating leases).

Moody’s assigns Techem notes B1

Moody’s Investors Service said it assigned a B1 rating to the proposed €600 million senior secured notes to be issued by Techem Verwaltungsgesellschaft 675 mbH. At the same time Moody’s affirmed the B2 corporate family rating and the B2-PD probability of default rating of Techem Verwaltungsgesellschaft 674 mbH.

Moody’s also affirmed the B1 rating of the senior secured first-lien term loan maturing in 2025 and the senior secured revolving credit facility raised by Techem Verwaltungsgesellschaft 675 mbH and the Caa1 rating of the senior secured second-lien notes due 2026 raised by Techem. The outlook on all ratings remains stable.

Proceeds will be used to refinance part of the existing term loan B.

S&P rates Techem notes B+

S&P said it assigned a its B+ issue-level rating and 3 recovery rating to Techem Verwaltungsgesellschaft 675 mbH’s proposed €600 million senior secured bond. Techem Verwaltungsgesellschaft 675 mbH is the wholly owned subsidiary of Techem Verwaltungsgesellschaft 674 mbH (Techem 674; formally Blitz F18 674 mbH). “We understand proceeds will partially refinance its existing €2.29 billion senior secured term loan,” said S&P in a press release.

The B+ issue-level rating is in line with the issuer credit rating on Techem 674. The 3 recovery rating indicates the agency’s expectation of meaningful (50%-70%; rounded estimate 60%) recovery in the event of a default.

S&P assigns VICI notes BB

S&P said it assigned its BB issue-level rating and 3 recovery rating to VICI Properties LP’s proposed $2.5 billion of aggregate five-year, seven-year, and 10-year senior unsecured notes. The 3 recovery rating indicates an expectation for meaningful (50% to 70%; rounded estimate: 65%) recovery for noteholders in the event of a payment default. At the same time, the agency revised its recovery rating on VICI’s existing unsecured notes to 3 from 4. The BB issue-level rating on these notes is unchanged.

VICI plans to use proceeds to fund acquisitions S&P expects to close by mid-2020, to redeem its $498 million of second-lien secured notes and to pay fees and expenses.

“The improved recovery prospects for unsecured noteholders reflects less secured debt in the capital structure in our hypothetical default scenario than we previously assumed. This is because VICI is redeeming its second-lien secured notes and plans to fund known acquisition spending in the first half of 2020 with the proceeds from this unsecured notes issuance, as opposed to term loan debt as we had previously assumed,” said S&P in a press release.

Pro forma for this proposed unsecured notes issuance, VICI’s unsecured debt will comprise about 60% of its total capital structure (incorporating the company’s undrawn revolver capacity).

Moody’s gives Aernnova, loan B1

Moody’s Investors Service said it assigned a B1 corporate family rating and B1-PD probability of default rating (PDR) to Aernnova Aerospace Corp. SA. Moody’s also assigned B1 ratings to the €390 million senior secured term loan B-1 and the €100 million delayed draw senior secured term loan B-2; with maturity in 2027, as well as to the €100 million senior secured revolving credit facility, maturing in 2026. Debt instruments will be issued by Aernnova Aerospace, SAU and guaranteed by Aernnova. The outlook is stable.

The B-1 proceeds will be used to refinance €280 million of debt, to fund €100 million shareholder distributions and to pay transaction fees and expenses. The proceeds of the term loan B-2 are expected to be used either for a second shareholder distribution or to fund new acquisitions.

“The B1 CFR is balancing Aernnova’s relatively smaller scale and high concentration in terms of customers and end-markets compared with larger peers in the industry with its long-term cooperation with aerospace OEMs, a strong competitive position in its niche market as well as its proven strong cash flow generation that will enable the company to delever quickly after refinancing,” said Ana Luz Silva, Moody’s lead analyst, in a press release.

S&P gives AI Convoy, loan B

S&P said it assigned B ratings to AI Convoy (Luxembourg) Sarl and its proposed first-lien debt. The recovery rating is 3.

“AI Convoy (Luxembourg) Sarl (Cobham) is being acquired by private-equity firm Advent and raising $2.847 billion of new term debt as part of the transaction. This debt will comprise a $350 million revolving credit facility (RCF), $2.175 billion of first-lien debt (comprising an €885 million euro-denominated first-lien term loan B and a $1.188 billion U.S.-dollar-denominated tranche of first-lien debt), and a $672 million U.S.-dollar-denominated second-lien loan. We also note the presence in the group structure of $690 million equivalent sterling denominated payment-in-kind (PIK) preference shares held by minority co-investor Blackstone (that we view as debt-like) and $1.025 billion of interest-free preferred equity certificates (Ifpecs) held by Advent and Blackstone (that we also view as debt-like),” said S&P in a press release.

Post transaction, S&P Global Ratings-adjusted leverage for full-year 2020 is forecasted to be about 10x including the $690 million equivalent sterling-denominated preference shares and Ł1.025 billion Ifpecs, and about 6.5x excluding them, making Cobham one of the more highly leveraged issuers in the Europe, Middle East, and Africa aerospace and defense portfolio.

The outlook is stable.

Moody’s gives Armacell loan B3

Moody’s Investors Service said it assigned a B3 corporate family rating and a B3-PD probability of default rating to Neptune Holdco Sarl (Armacell) and a B3 instrument rating to the €710 million senior secured term loan B and €110 million senior secured revolving credit facility borrowed by Neptune Bidco Sarl and co-borrowed by Neptune US Bidco Inc., both subsidiaries of Neptune Holdco Sarl. The outlook is stable.

Neptune Holdco, controlled by a consortium consisting of PAI Partners and Kirkbi A/S, will acquire Armacell Holdco Luxembourg Sarl, which is currently controlled by a consortium consisting of private equity funds managed by Blackstone and Kirkbi. Moody’s sees withdrawing the ratings on Armacell Holdco Luxemburg and the instruments ratings on its €622 million term loan and €100 million senior secured revolving credit facility borrowed by Armacell Bidco Luxembourg Sarl upon the closing of the acquisition expected in February 2020.

Armacell’s B3 CFR is constrained by a high pro forma Moody’s adjusted gross starting leverage of 7.2x and Moody’s expectation leverage will remain elevated at around 7x in 2020 and only gradually fall below 7x in 2021.

Moody’s upgrades Leidos notes

Moody’s Investors Service said it upgraded the senior unsecured notes of Leidos Holdings, Inc. reflecting the elimination of collateralized debt at Leidos, Inc. the company’s direct subsidiary. All other ratings, including the Baa3 senior (now unsecured) note ratings of Leidos, Inc. and the stable rating outlook are unchanged.

“The presence of a secured credit facility and secured notes at Leidos, Inc. had been effectively subordinating the unsecured notes of Leidos Holdings but a replacement unsecured credit facility has been arranged and the collateral supporting the Leidos, Inc. notes has thereby released, creating a fully unsecured, equally guaranteed debt capital structure,” said Bruce Herskovics, Moody’s lead analyst for Leidos, in a press release.

S&P revises Pearson view to negative

S&P said it revised the outlook for Pearson to negative from stable and affirmed its long-term ratings on the group and its debt at BBB.

Pearson’s 2020-2021 profitability and EBITDA generation will likely be weaker than the agency had previously anticipated, reflecting the ongoing substantial decline in its U.S. higher education courseware sales.

The outlook revision to negative reflects Pearson’s S&P Global Ratings-adjusted EBITDA will likely fall below S&P’s previous base case this year, S&P said.

“Based on the recent trading update, we estimate that Pearson’s S&P Global Ratings-adjusted debt to EBITDA increased to about 1.7x-1.9x in 2019 from 1.6x in 2018,” S&P said in a press release.

Fitch rates Target notes A-

Fitch Ratings said it assigned an A- rating to Target Corp.’s proposed issuance of 10-year notes, which Fitch believes could be up to $1 billion. The proceeds will be used for general corporate purposes, including the refinancing of Target’s $1.1 billion of 2020 maturities.

Target’s A- rating reflects its strong U.S. market position, well-recognized brand name, and moderate financial leverage with adjusted debt/EBITDAR (capitalizing rent at 8x) expected to be around 2x.

The outlook is stable.

S&P gives Target notes A

S&P said it assigned its A issue-level rating to Target Corp.’s proposed senior unsecured notes due 2030.

“We expect the transaction to be leverage neutral because the company plans to use the net proceeds (expected to be in the $500 million-$1 billion range) from these notes to repay $1 billion of its existing July 2020 notes later this month. Pro forma for the transaction, we expect Target’s S&P-adjusted debt leverage to remain unchanged at about 1.8x,” said S&P in a press release.

Fitch rates Waste Connections notes BBB+

Fitch Ratings said it assigned a BBB+ rating to Waste Connections, Inc.’s proposed offering of $500 million of senior unsecured notes due 2030. Proceeds will be used for debt repayment and general corporate purposes. The notes will be pari passu with the company’s senior unsecured debt.

Fitch currently rates Waste Connections’ long-term issuer default rating, senior unsecured bank debt and senior unsecured notes BBB+. The outlook is stable.

S&P assigns Waste Connections notes BBB+

S&P said it assigned its BBB+ issue-level rating to Waste Connections Inc.’s proposed senior unsecured notes due 2030 (S&P believes the company will issue at least $500 million of notes).

Proceeds are expected to be used for general corporate purposes, which may include refinancing the outstanding borrowings under its revolving credit facility due March 2023. In 2019, the company used its revolver to fund acquisitions and repay $175 million of senior notes in the fourth quarter.

“We view Waste Connections’ adjusted debt to EBITDA of 2.5x as of Sept. 30, 2019, as appropriate for the current rating. All of our other ratings on Waste Connections Inc. and its subsidiary IESI Corp. remain unchanged, including our BBB+ issuer credit ratings,” said S&P in a press release.

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