S&P cuts Del Monte Foods

S&P said it downgraded its ratings for Del Monte Foods Inc. and its first-lien term loan to CCC from CCC+. The recovery rating remains 3. S&P also lowered the issue-level rating on the company's second-lien term loan to CC from CCC-. The recovery rating remains 6. Also, the agency withdrew the CCC+ issue-level rating and 3 recovery rating assigned to the proposed $575 million notes.

Del Monte had launched a $575 million bond refinancing transaction but will postpone the offering due to the volatility in the markets driven by the coronavirus. The downgrade reflects the company’s increased financing risk.

“We believe that it will take longer than previously expected to complete a refinancing with reasonable terms given the company's current standing in the credit markets and uncertain market conditions,” said S&P in a press release.

The outlook is negative.

S&P downgrades U .S. Silica

S&P said it downgraded the ratings for U.S. Silica Co. and its $1.28 billion senior secured term loan to CCC+ from B-. The 3 recovery rating is unchanged, indicating an expectation of meaningful recovery (50%-70%; rounded estimate: 60%) in the event of a payment default.

“Our revised forecast for U.S. Silica Co. acknowledges far more challenging operating conditions in oil and gas end markets than previously anticipated,” said S&P in a press release. S&P said it is now forecasting leverage for the company approaching 8x compared with the prior forecast of 3x-4x.

The outlook is negative.

S&P ups Ascena Retail

S&P said it upgraded Ascena Retail Group Inc. to CCC- from SD, but kept the D rating on the company’s term loan due August 2022. Ascena recently bought back $122 million of its term loan below par, which S&P considered a distressed transaction so it lowered the company’s rating to SD.

“The rating action reflects our view of the likelihood of a conventional default or a broad-based restructuring of Ascena's capital structure in the next six months. Our opinion considers the company’s unsustainable capital structure, its still significant debt burden following the repurchases, and our expectation for weak performance amid a highly challenging operating environment,” said S&P in a press release.

The outlook is negative.

S&P puts AMC on watch

S&P said it placed its ratings for AMC Entertainment Inc., including its B rating, on CreditWatch with negative implications.

The placement reflects S&P’s expectation the measures enacted to limit the spread of the coronavirus will hurt theater attendance over the next few months leading to lower EBITDA and cash flow for the company.

“We intend to resolve the CreditWatch as we get additional information on near-term box office attendance trends and potential updates to the film release slate arising from the impact of the spread of coronavirus. We also plan to continue discussions with management to determine the severity of the impact and what levers it plans to use to offset the negative impact of the virus on the company's performance,” said S&P in a press release.

S&P places American Airlines on watch

S&P said the steep decline in airline bookings due to the coronavirus pandemic will lead to weaker credit metrics and cash flow for American Airlines Group Inc. The agency placed its ratings American Airlines Group Inc. and its subsidiary American Airlines Inc. on CreditWatch with negative implications.

“We now expect funds from operations (FFO) to debt to decline to the high-single-digit percent area in 2020, compared with our previous expectation of the high-teens-percent area, assuming passenger traffic begins to recover later this year,” said S&P in a press release.

S&P said it expects to resolve the CreditWatch when it has more information regarding the degree and timing of the return of passenger travel.

S&P places AVSC on watch

S&P said its placed its AVSC Holding Corp. ratings on CreditWatch with negative implications.

“The Covid-19 outbreak has led to an increasing number of corporate event cancellations and lower hotel occupancy rates. We expect this to impair AVSC, an audio-visual technology provider that primarily services corporate events in hotel-based venues,” said S&P in a press release.

The agency expects to resolve the CreditWatch once it assesses the breadth and depth of the reduction of corporate events and business travel, which directly reduces the services hotels need from AVSC.

S&P puts Cinemark on watch

S&P said it placed its ratings for Cinemark Holdings Inc., including its BB rating, on CreditWatch with negative implications.

“The CreditWatch placement reflects our expectation that the spread of coronavirus will negatively affect theater attendance over the next few months and result in significantly lower EBITDA and cash flow for exhibitors in 2020,” said S&P in a press release.

S&P said it intends to resolve the CreditWatch as it gets more information on near-term box office attendance trends and potential updates to the film release slate and impact on financial performance due to the spread of coronavirus.

Fitch places Cineworld on watch

Fitch Ratings said it placed Cineworld Group plc's long-term issuer default rating of B+ and expected senior secured debt rating BB- on rating watch negative.

“The RWN reflects uncertainties in trading as a result of Covid-19. Social-distancing measures may in a worst-case scenario require cinema closure with significant impact on revenues that Cineworld may not be able to fully mitigate. Under some of our scenarios analyzed, prolonged cinema closures could weaken liquidity and lead to the company breaching its debt covenants. Cineworld retains capex and dividend flexibility that should help it traverse all but the worst-case scenarios without any covenant breach. Cineworld has said so far it has not observed any material impact on movie theatre attendance due to Covid-19,” said Fitch in a press release.

The resolution of the RWN will depend on the severity of the effect on Cineworld's trading particularly in the second quarter, the ability to reduce fixed costs and the pressures on liquidity.

S&P puts Emerald X on watch

S&P said it placed its B+ ratings on Emerald X Inc. and its senior secured credit facility on CreditWatch with negative implications.

The CreditWatch placement on Emerald X, Inc. reflects its vulnerability to event cancellations stemming from the Covid-19 pandemic and the limited visibility into how widespread and drawn-out the effect will be. Companies have increasingly imposed restrictions on their employees' nonessential travel through February and March, which has led to the cancellation or postponement of numerous conferences worldwide in the first quarter, the agency said.

“In resolving the CreditWatch placement, we will evaluate new information regarding the spread of Covid-19 and its impact on Emerald's operating performance, liquidity, and cash flows,” S&P said in a press release.

S&P puts Endeavor, UFC on watch

S&P said it placed the ratings for Endeavor Operating Co. LLC and subsidiary UFC Holdings LLC on CreditWatch with negative implications.

The CreditWatch placements with negative implications reflect pressure on Endeavor's and UFC's various revenue streams due to the spread of the coronavirus. S&P said it preliminarily expects Endeavor to be very highly leveraged with adjusted debt to EBITDA of about 7x in 2020, incorporating a preliminary estimate of a mid-teens percent decline in events, media and services revenue, as well as a substantial decline in UFC's live ticketing revenue.

“We plan to resolve the CreditWatch placements once we can assess and quantify the effects of event cancellations on Endeavor's and UFC's EBITDA and liquidity,” S&P said in a press release.

S&P puts Getty Images on watch

S&P said it placed its ratings for Getty Images Inc., including the B- issuer credit rating, on CreditWatch with negative implications.

“We believe that event cancellations and continued weakness in economic conditions could cause Getty's 2020 leverage to remain above 9x, compared to our previous forecast of about 7.5x, and free operating cash flow will likely decline below our previous forecast of $60 million-$70 million,” said S&P in a press release.

In resolving the CreditWatch, S&P said it will determine to what extent the Covid-19 outbreak affects the company's revenue and earnings, including the potential for further delays and disruptions of major events later in the year, including the Olympics.

S&P puts Hoya Midco on negative watch

S&P said it placed its ratings for Hoya Midco LLC (Vivid Seats), including its B issuer credit rating, on CreditWatch with negative implications.

The growing number of event cancellations and postponements due to the coronavirus pandemic will hurt the company’s operating performance, the agency said.

“We expect to resolve the CreditWatch placement as we continue to assess the potential for further delays and disruptions to events that reduce the value of resale tickets processed by Vivid Seats,” said S&P in a press release.

S&P places Live Nation on watch

S&P said it placed its ratings on Live Nation Entertainment Inc., including the company’s BB- rating, on CreditWatch with negative implications.

“The CreditWatch placements reflect the growing number of postponed live events in the live music industry and the pace of the spread of Covid-19 across the globe. In our view, these scheduling disruptions could affect live event companies such as Live Nation Entertainment Inc. that depend on robust festival and music venue attendance,” said S&P in a press release.

In resolving the CreditWatch placements, the agency said it will determine to what extent Covid-19 affects the company's revenue growth, profitability and leverage relative to its expectations for the rating.

Moody's revises Minotaur view to negative

Moody’s Investors Service said it revised the outlook for Minotaur Acquisition, Inc. to negative from stable. Minotaur is the debt-issuing entity of Millennium Trust Co. LLC.

“The change in outlook to negative from stable reflects Moody’s expectation of declining revenue and profitability starting in 2021/2022. The recent Federal Reserve Board (Fed) cut to the fed funds rate to the 0%-0.25% range is credit negative for Minotaur because as deposits mature and as new cash balances are added to Millennium’s platform, they will be rolled into new deposit programs with partner banks and priced at rates that exist at the time, and these rates are likely to be lower than the rates Millennium is currently contracted to earn. Based on the laddering of Millennium’s existing cash sweeps, Moody’s expects its profitability to be significantly impacted by lower rates starting in the second half of 2021,” the agency said in a press release.

Moody’s also affirmed Minotaur’s B3 corporate family rating, B2 $610 million senior secured first-lien term loan and $90 million revolver and affirmed its Caa2 $245 million second-lien term loan.

S&P puts Pugnacious on watch

S&P said it placed its ratings for Pugnacious Endeavors Inc., including the B issuer credit rating on the company, on CreditWatch with negative implications.

The CreditWatch placement reflects the company's exposure to canceled or postponed live events due to the ongoing Covid-19 pandemic. The company depends on the robust demand for sporting, music and theater events so that consumers continue to use its secondary ticketing platform to gain access to these live events, the agency said.

“In resolving the CreditWatch, we will determine to what extent Covid-19 affects the company's revenue growth, expected leverage, cash flow generation and liquidity,” said S&P in a press release.

S&P shifts United Airlines view to negative

S&P said it revised its outlook on United Airlines Holdings Inc. and its subsidiary United Airlines Inc. to negative from positive. The agency also affirmed the BB issuer credit rating on the airline.

Citing, the lower demand for air travel caused by the coronavirus pandemic, the agency said in a press release, “We now expect funds from operations (FFO) to debt to decline to the mid-20% area in 2020, compared with our previous expectation of at least 35%, assuming passenger traffic begins to recover later this year.”

S&P puts WireCo on watch

S&P said it placed its ratings for WireCo WorldGroup Inc. on CreditWatch with negative implications following S&P Global's revision of its West Texas Intermediate price assumption to $35 per barrel in 2020 from $55 per barrel.

“Given the current environment, we are now assuming domestic producers cut capital spending by 20% to 30% this year. This could cause the company's steel rope volumes and conversion spreads to contract. We estimate a 10% fall in each factor would lead to adjusted debt to EBITDA and EBITDA interest coverage moving closer to 8x and 1x, respectively, from current expectations of about 7x and 1.5x,” said S&P in a press release.

S&P plans to resolve the CreditWatch over the next six months after its more certain of the effect of the drop in oil prices on the company’s volumes and credit metrics.

Moody's reviews Altisource for trim

Moody's Investors Service said it placed on review for downgrade Altisource Sarl's B3 corporate family rating and B3 long-term senior secured bank credit facility rating.

The review was prompted by the recent announcement from Altisource's chairman and chief executive officer about the uncertainty surrounding the revenues for downstream services that Altisource provides to Ocwen Loan Servicing, LLC, the operating subsidiary of PHH Mortgage Corp. on the loan portfolios owned by New Residential Investment Corp.

These revenues would account for about 40% of Altisource's total revenues in 2020 and do not include the revenues under the cooperative brokerage agreement between Altisource and New Residential.

Moody's reviews Nascar for downgrade

Moody's Investors Service said it placed Nascar Holdings, Inc.'s ratings on review for downgrade, including the Ba2 corporate family rating, Ba2-PD probability of default rating and Ba2 first-lien credit facility ratings due to the coronavirus outbreak's potential impact on Nascar's ability to hold race events, as well as the negative effects on consumer sentiment and the overall economy.

Nascar announced on Friday two upcoming Nascar events will be postponed due the coronavirus. The review for downgrade will focus on any additional changes to Nascar's ability to hold future races, leverage levels, interest coverage and the company's liquidity position.

The rating outlook was changed from stable to ratings under review.

Moody's reviews Speedway for downgrade

Moody's Investors Service said it placed Speedway Motorsports, LLC's ratings on review for downgrade, including the Ba3 corporate family rating, Ba3-PD probability of default rating and B1 senior unsecured note due to the coronavirus outbreak's potential impact on the ability to hold Nascar events, as well as the negative effects on consumer sentiment and the overall economy.

On Thursday, it was announced that two upcoming Nascar events will be postponed due to the coronavirus. The review for downgrade will focus on any additional changes to the ability to hold future Nascar races, leverage levels, interest coverage, and the company's liquidity position. The rating outlook was changed from stable to ratings under review.

S&P snips Amphora

S&P said it downgraded the ratings on Amphora Intermediate II Ltd. and its £301 million term loan to B- from B.

“We estimate that the recent challenges at the Berri Estate factory and lower-than-anticipated efficiency of the new lines will put pressure on the company's leverage and margins,” said S&P in a press release.

Accolade Wines recently invested to automate and bring in-house all its Australian bottling and warehousing activities and to add sparkling wine capabilities to its factory located at Berri Estate, Australia.

The outlook is stable.

S&P acts on theme parks

S&P said restrictions on travel and public gatherings caused by the coronavirus pandemic makes visiting theme parks increasingly difficult and less desirable. Also, “We believe there is also a rising chance of recession stemming from the spread of the coronavirus that could impair consumer discretionary spending this year,” said S&P in a press release.

The agency cut its ratings on SeaWorld Parks & Entertainment Inc. by two notches, including the issuer credit rating to B- from B+, and placed all ratings on Credit Watch with developing implications.

S&P lowered Cedar Fair LP's ratings by two notches, including the issuer credit rating to B+ from BB, and placed them on CreditWatch with developing implications.

S&P also trimmed Six Flags Entertainment Corp.'s ratings two notches, including the issuer credit rating to B+ from BB, and placed them on CreditWatch with negative implications.

“We plan to resolve the CreditWatch listings once we can assess the potential future impact of the outbreak on revenue, EBITDA and liquidity of each company. We may resolve the CreditWatch listings separately or at the same time, depending upon events such as park closings,” the agency said.

S&P trims Boeing

S&P said it downgraded its ratings on the Boeing Co. and its unsecured debt ratings to BBB from A-. The ratings remain on CreditWatch, where they were placed with negative implications on Jan. 23.

“Cash flow and credit ratios will likely be much weaker than we had expected for the next two years. We now expect free cash flow to be an outflow of $11 billion-$12 billion in 2020 and an inflow of $13 billion-$14 billion in 2021. This compares to our previous expectation of positive $2 billion in 2020 and $22 billion in 2021,” said S&P in a press release.

The CreditWatch placement reflects that the agency could lower the rating if it does not believe funds from operations to debt will increase to above 25% or free operating cash flow to debt will increase to above 15% in the next 12-24 months, S&P said.

S&P puts Delta Air on watch

S&P said the steep drop in demand for air travel will likely hurt Delta Air Lines Inc.’s operating results; therefore, it is placing its ratings on Delta, including its BBB- issuer rating, on CreditWatch with negative implications.

On Friday, Delta announced it will suspend all flights to continental Europe for at least 30 days, reduce its overall passenger-carrying capacity by 40% and delay the delivery of new aircraft.

“We expect to resolve the CreditWatch as we learn more about the impact of the coronavirus on Delta's financial position,” said S&P in a press release.

Moody's reviews Genting for downgrade

Moody's Investors Service said it placed on review for downgrade the Baa1 issuer rating of Genting Bhd. and the A3 issuer rating of Genting Singapore Ltd. Moody's also placed on review for downgrade the Baa1 issuer rating of Genting Overseas Holdings Ltd.

Concurrrently, Moody's placed on review for downgrade the Baa1 backed senior unsecured rating of the notes issued by GOHL Capital Ltd., a wholly owned subsidiary of Genting Overseas, which guarantees the notes. Moody's changed the outlook on all ratings to ratings under review for downgrade from stable.

“The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The gaming sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment,” said Moody’s in a press release.

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