S&P lowers EP Energy, rates notes BB-

S&P said it lowered the rating on EP Energy LLC's priority-lien term loan to B from B+ and revised the recovery rating to 4 from 2.

The recovery rating indicates 30% to 50% expected default recovery.

Because there is already limited cushion at the 4 recovery rating if EP Energy upsizes the proposed senior note offering from the initial $350 million, S&P said it could consider revising the recovery expectation downward and lowering the rating on the term loan.

The agency also said it assigned a BB- rating to EP Energy's proposed $350 million senior secured notes due 2023 with a recovery rating of 1, indicating 90% to 100% expected default recovery.

The proceeds will be used to pay down a portion of the existing reserve-based facility and for general corporate purposes, S&P said.

The downgrade follows news that EP Energy plans to issue $350 million of senior secured notes due 2023, which will rank senior to the priority-lien term loan due 2021 in the capital structure, the agency said.

The recovery and issue-level ratings for the remaining second-lien secured term loans and senior unsecured debt are unchanged at 6 and CCC+, respectively.

The B corporate credit rating and negative outlook are unaffected.

S&P downgrades Bumble Bee

S&P said it lowered the corporate credit rating on Bumble Bee Holdings Inc. to B- from B and placed all of the ratings mentioned herein on CreditWatch with negative implications.

The agency also said it lowered the rating on the company's $605 million senior secured notes due in December 2017 to B- from B.

The recovery ratings remain at 3, indicating 50% to 70% expected default recovery.

S&P also said it lowered the rating on the company's $150 million senior paid-in-kind toggle notes due in March 2018 to CCC from CCC+.

The recovery ratings remain at 6, indicating 0 to 10% expected default recovery.

The ratings reflect a view of heightened refinancing risk given Bumble Bee's upcoming 2017 maturity, which remains unaddressed, and the uncertainty with regard to a Department of Justice settlement, S&P said.

The ratings could be lowered in the near term if the company does not address or resolve its upcoming asset-backed lending revolving credit facility maturity by early 2017, the agency said.

Moody’s drops EP Energy loan, rates notes B3

Moody's Investors Service said it assigned a B3 rating to EP Energy LLC's proposed senior secured notes due 2023.

The agency also affirmed EP Energy’s Caa1 corporate family rating, Caa1-PD probability of default rating, Caa1 second-lien term loan ratings, Caa2 unsecured note ratings and the SGL-3 speculative grade liquidity rating.

The secured term loan due 2021 was downgraded to Caa1 from B3.

The outlook was changed to stable from negative.

Proceeds from the notes issuance will be used to repay revolver borrowings and for general corporate purposes.

"The proposed notes will boost EP Energy's liquidity and support an increase in capital spending in 2017," Moody's vice president, senior analyst James Wilkins said in a news release.

Moody’s drops LSB, notes to Caa1

Moody's Investors Service said it downgraded LSB Industries, Inc.'s corporate family rating to Caa1 from B3, probability of default rating to Caa1-PD from B3-PD and the $375 million guaranteed senior secured notes to Caa1 from B3.

The actions reflect the combined negative effects of the nitrogen fertilizer industry downturn and LSB's continued operating challenges that have reduced production, increased costs and resulted in earnings losses, Moody’s said. While new nitrogen capacity is absorbed into the market through 2018, low nitrogen fertilizer prices will continue to compress margins and leave little room for operating inconsistency, downtime, or additional costs without resulting in negative free cash flow.

LSB's speculative grade liquidity rating was changed to SGL-3 from SGL-4 due to the proceeds from the climate control business divestiture.

The outlook is stable. This concludes the review commenced on Oct. 14.

Moody’s drops Obrascon Huarte, debt to Caa1

Moody's Investors Service said it downgraded Obrascon Huarte Lain SA’s corporate family rating and senior unsecured debt instrument ratings to Caa1 from B3.

Concurrently, the agency downgraded the probability of default rating to Caa1-PD from B3-PD.

The outlook is negative.

"The downgrade is primarily driven by a further slump in earnings of OHL's core Engineering and Construction businesses in 3Q 2016 following a significant decline in the previous four quarters that translated into material negative free cash flow generation and rising recourse debt levels. This development is against a previously expected gradual recovery over H2 2016 and beyond, and will prevent any improvement of gross recourse-leverage within the next 12-18 months to levels of below 7.5x, which we had expected for the previous rating level," Moody's vice president, senior analyst Matthias Heck said in a news release.

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