Moody’s downgrades Wepco, Wisconsin Gas

Moody’s Investors Service downgraded Wisconsin Electric Power Co., Wisconsin Gas LLC, Wisconsin Public Service Corp. and Elm Road Generating Station Supercritical, including their senior unsecured ratings to A2 from A1. It affirmed the P-1 short-term rating of Wisconsin Electric Power, Wisconsin Gas and Wisconsin Public Service. The outlooks are stable.

Moody’s also affirmed the ratings of parent WEC Energy Group, Inc., Wisconsin Energy Capital Corp. and Integrys Holding, Inc., including their A3 senior unsecured ratings, and changed their outlooks to negative from stable.

Moody’s said the downgrade is prompted by its expectation that key credit metrics will remain at a level that is more appropriate with the low-to mid-range of the A rating category.

In addition, Moody’s expects that the three utility subsidiaries will stay out of their general rate cases this year for the 2018 and 2019 period given an agreement with several of their large customers, which will contribute to these lower financial metrics.

The negative outlooks of WEC, Wisconsin Energy Capital and Integrys are largely triggered by the anticipated deterioration in consolidated key credit metrics.

S&P lifts Nippon Steel stable

S&P said it revised to stable from negative the outlook on its long-term corporate credit rating on Nippon Steel & Sumitomo Metal Corp.

The agency also said it affirmed the company's BBB long-term corporate credit and senior unsecured ratings.

The outlook revision was because major financial ratios for the company were slightly above expectations in fiscal 2016, which ended March 31, 2017, S&P said.

This was thanks to asset sales even though the company made large investments during the period, including acquisition of Nisshin Steel Co. Ltd. as a consolidated subsidiary, the agency explained.

S&P said it bases the outlook revision on a likelihood that the company's profitability and major financial ratios will improve and remain commensurate with the current rating.

Some stability is expected to return to the environment for the steel business at home and abroad, the agency added.

S&P rates Baker Hughes A+, lifts debt to A+

S&P said it assigned an A+/A-1 corporate credit rating to Baker Hughes Inc.

The outlook is stable, reflecting the stable outlook on General Electric Co.

S&P also said it raised the long-term issue-level rating on Baker Hughes' senior unsecured debt to A+ from A and removed the rating from CreditWatch, where it was placed with positive implications in October 2016.

The agency also said it affirmed the short-term A-1 rating on the company's commercial-paper program and removed the rating from CreditWatch, where they were placed with positive implications in October 2016.

The ratings reflect a belief that the company is highly strategic to General Electric, S&P said.

Moody’s upgrades Fresenius

Moody’s Investors Service upgraded the long-term issuer rating of Fresenius Medical Care Holdings, Inc. to Baa3 from Ba2. Fresenius Medical Care is the holding company consolidating all U.S. operations of Fresenius Medical Care AG & Co. KGaA, which is rated Baa3. The outlook is stable.

The action ends a review begun on May 11.

Moody’s said the upgrade reflects the company’s standalone credit profile but also the fact that it is a material subsidiary of Fresenius Medical Care, generating around 70% of consolidated sales and EBITDA.

In addition, Moody’s expects that Fresenius Medical Care AG and Fresenius Medical Care Holdings will move to a wholly unsecured capital structure over time thereby reducing the structural subordination.

Fresenius Medical Care Holdings’ standalone operating profitability and credit metrics are relatively similar to those of its parent company, Moody’s said. Margin pressure in the U.S. dialysis business and strong growth of its margin-dilutive care coordination are mitigated by improvements in payor mix and costs.

In addition, Fresenius Medical Care Holdings has a very strong cash conversion and cash flow generation broadly in line with its parent.

Moody’s reviews Honda for downgrade

Moody’s Japan KK put Honda Motor Co., Ltd.’s A1 issuer rating and the A1 senior unsecured ratings of its captive finance subsidiaries on review for downgrade. It affirmed the Prime-1 commercial paper ratings for Honda and its captive finance subsidiaries.

Moody’s said it believes Honda has manageable exposure to Takata, which filed for bankruptcy protection on June 26. Cash payments for repair costs will reduce cash flow slightly but Moody’s expects that the company’s strong balance sheet can easily absorb these payments.

However the rating agency said there are challenges for Honda to increase its margins above the levels of other auto companies that are rated similarly, such as Bayerische Motoren Werke Aktiengesellschaft, Daimler AG and Nissan Motor Co., Ltd.

Moody’s estimates that the Honda’s increased investment between fiscal 2013 and fiscal 2015 to expand its global production capability has raised the company’s cost base.

Fitch rates Enbridge notes BBB+

Fitch Ratings assigned a BBB+ rating to Enbridge Inc.’s offering of $1.4 billion in senior unsecured notes due 2022 and 2027. The outlook is stable.

Fitch said the ratings reflect Enbridge’s beneficial size and scale, as well as, the cash flow stability provided to Enbridge by its low risk businesses.

They also reflect the diversity of cash flows, low customer credit risk, an array of credit-supportive financial policies concerning liquidity and hedging, the company’s proven ability to tap multiple deep pools of debt and equity capital, and its decade-plus demonstrated competence in the construction phase of its development undertakings.

Concerns include high leverage, organizational complexity and high capital spending levels. Additional concerns are high payout ratio guidance, structural subordination and merger integration risk.

Moody’s affirms AXIS Capital

Moody’s Investors Service affirmed the ratings of AXIS Capital Holdings Ltd. and its subsidiaries including the preferred stock at Baa3(hyb) and the guaranteed senior debt of its finance subsidiaries at Baa1. The outlook is stable.

The action follows AXIS’ announcement that it will acquire Novae Group plc and its associated Lloyds syndicates for $604 million in cash.

Moody’s said the proposed acquisition has strategic benefits for AXIS as it would significantly expand

AXIS’ Lloyds presence. Novae has a good presence in specialty lines of business including marine hull and liability, energy and cyber liability. The acquisition will also incrementally boost AXIS’ profitability.

However, Moody’s said it views the transaction overall as credit negative, given expected increases in operational leverage coupled with higher catastrophe risk, although it expects AXIS to reduce catastrophe exposure over time.

Moody’s affirms Columbia Property

Moody’s Investors Service affirmed all of the ratings of Columbia Property Trust, Inc. including the Baa2 senior unsecured debt rating of its operating subsidiary, Columbia Property Trust OP, LP. The outlook remains stable.

The affirmation follows the REIT’s announcement that it has completed a large joint venture transaction with Allianz Real Estate initially valued at $1.3 billion, Moody’s said.

The stable outlook reflects the agency’s expectation that Columbia will maintain its conservative financial profile as it seeks continued growth, both within and outside of its joint ventures.

Moody’s affirms Commerce Bank

Moody’s investors Service affirmed its Commerce Bancshares, Inc. and its subsidiaries, including Commerce Bancshares’s preferred stock at Baa1(hyb) and Commerce Bank’s issuer rating at A2.

The outlook is stable.

Moody’s said the affirmation reflects the bank’s consistently strong and stable asset quality, its solid capitalization and profitability, and its robust core funding and liquidity. These characteristics are supported by the bank’s established direct banking franchise in the Midwest, the agency added.

The stable outlook reflects Moody’s expectation of little change in the bank’s strong credit metrics during the next two years.

Moody’s affirms TC PipeLines

Moody’s Investors Service affirmed the Baa2 senior unsecured rating of TC PipeLines, LP. The outlook remains stable.

Moody’s said the company exhibits a low business risk profile, generates stable contracted revenues and benefits from the support of a strong sponsor.

These positive attributes mitigate the company’s relatively small scale and high leverage, it added.

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