Moody's lowers Artesyn Embedded

Moody's Investors Service said it downgraded Artesyn Embedded Technologies, Inc.'s corporate family rating to Caa1 from B3 and probability of default rating to Caa1-PD from B3-PD.

The agency also said it downgraded the rating on the company's senior secured notes due 2020 to Caa2 (LGD 5) from Caa1 (LGD 5).

The outlook changed to negative from stable.

The downgrades were driven by an expectation that Artesyn's free cash flow will be weaker than anticipated, combined with the company's revolving credit facility potentially maturing within 14 months if the notes are not refinanced, Moody's explained.

As a consequence of expected revolver usage, the company's debt-to-EBITDA is expected to remain higher than historical levels at about 5x, the agency said.

The ratings consider the company's technical capabilities, well-established relationships with major telecom and technology firms, global presence and competitive cost structure, Moody's said.

These strengths are counterbalanced by the variability in the company's earnings due to its exposure to the highly cyclical and short-cycle consumer electronics, computing and telecom businesses, the agency said.

S&P downgrades Bristow

S&P said it lowered the issuer credit rating on Bristow Group Inc. to CCC+ from B-.

The agency also said it lowered the rating on its unsecured debt to CCC from CCC+ with a 5 recovery rating, indicating 10% to 30% expected default recovery.

S&P also said it lowered the rating on the company's secured notes due 2023 to B from B+ with a 1 recovery rating, indicating 90% to 100% expected default recovery.

The agency said it expects leverage to remain elevated at more than 7x with cash outflows continuing to pressure liquidity in the next 12- to 18-months.

The downgrades primarily reflect rapid deterioration in Bristow's liquidity, which decreased to $237 million at the end of December 2018 from $320 million at the end of September.

The negative outlook reflects Bristow's limited liquidity runway, weak operating trends and low trading levels on its securities, S&P said.

S&P downgrades Ditech

S&P said it lowered the issuer credit rating on Ditech Holding Corp. and the issue-level rating on the company's senior secured term loan due 2022 to D (default) from CC.

The rating on the second-lien notes remains at D.

The downgrades follow Ditech's restructuring support agreement with certain lenders holding more than 75% of its term loan, the agency said, and its voluntary filing for reorganization under Ch. 11 of the U.S. Bankruptcy Code.

The reorganization plan will reduce debt by more than $800 million as the term loan's outstanding debt balance would fall to $400 million from $961 million, S&P said, and the second-lien notes would not receive any distribution from the reorganized company.

This is the company's second Ch. 11 filing over the past two years.

The agreement also provides for Ditech to seek various specified types of transaction bids or proposals that will be evaluated as a precursor to the confirmation of any Ch. 11 reorganization plan, the agency explained.

If a bid or proposal represents a better value than the prearranged reorganization transaction, then it will either be incorporated into the transaction or pursued as an alternative to the transaction in consultation with the consenting term lenders, S&P said.

The company entered into an agreement to obtain up to $1.9 billion in available warehouse financing as part of a debtor-in-possession (DIP) facility to use for refinancing the company's existing warehouse and servicer advance facilities, the agency said, and funding its operations throughout the restructuring process.

The agreement and DIP facility are contingent on court approvals, S&P said.

Moody's downgrades Ditech

Moody's Investors Service said it downgraded Ditech Holding Corp.'s corporate family rating to Ca from Caa2, along with its senior secured bank credit facility rating to Ca from Caa2.

Moody's also said it withdrew the outlooks on DiTech's corporate family and senior secured bank credit facility ratings for its own business reasons.

Ditech Holding and certain of its direct and indirect subsidiaries filed for Ch. 11 bankruptcy, the agency said.

The company also disclosed that it had entered into a restructuring support agreement with lenders holding more than 75% of the loans and commitments outstanding under its senior secured term loan, Moody's explained.

Currently, the outstanding balance on the senior secured term loan is $961 million, the agency noted.

The downgrades reflect the proposed loss content of between 35% and 65% that the restructuring support agreement envisions, Moody's said.

Moody's lowers Westinghouse Air

Moody's Investors Service said it downgraded Westinghouse Air Brake Technologies Corp.'s senior unsecured to Ba1 from Baa3.

Moody's also said it assigned a corporate family rating of Ba1, probability of default rating of Ba1-PD and speculative grade liquidity rating of SGL-2.

The outlook is stable.

Westinghouse's earnings, cash flow and leverage lag levels anticipated at this time, Moody's said.

With the GE Transportation merger pending, the agency said it believes the combined earnings and cash flows will fall short of previous expectations.

Considering the size and scope of the large-scale merger coming as the company is still working through challenges of integrating Faiveley, Moody's said it believes that integration risk will be elevated over the next year or two.

The ratings also reflect expectations for more modest free cash flow and elevated financial leverage than initially anticipated over the next two years, the agency said.

The ratings also consider the company's leading position in the U.S. market for products and services in the freight rail sector, Moody's said.

Moody's lifts Avison Young view to positive

Moody's Investors Service said it affirmed Avison Young (Canada) Inc.'s corporate family rating at B2 and revised the outlook to positive from stable.

The outlook revision follows Avison Young's acquisition of GVA Grimley Holdings Ltd. in a cash transaction.

Moody's also assigned a senior secured rating of B2 (LGD 4) to Avison Young (Canada)'s $60 million senior secured asset based revolving credit facility due 2024 and $325 million senior secured term loan due 2026.

The agency also affirmed Avison Young's B2-PD probability of default rating.

The ratings reflect a view that the acquisition of GVA is a credit positive despite integration risks, Moody's said.

The proposed transaction further expands Avison Young's commercial real estate services position, by adding one of the largest global full-service commercial real estate services company with a significant consultancy and advisory business, the agency explained.

The acquisition also provides the company with additional growth and diversification benefits, Moody's said.

The agency also said it does not expect a meaningful increase to leverage with a debt-to-EBITDA ratio at 3.7x pro forma for the transaction, improving further over time as the company de-leverages through EBITDA growth and mandatory term loan amortization.

Moody's lifts Freedom Mortgage view to stable

Moody's Investors Service said it affirmed Freedom Mortgage Corp.'s B2 senior unsecured rating, Ba2 senior secured rating and B1 corporate family rating.

The agency also revised the outlook to stable from negative.

The ratings reflect Freedom's historically strong profitability, as well as solid capital level, Moody's said.

Risk factors offsetting these positive attributes include key man risk with respect to the company's president and chief executive officer, Stanley Middleman, as well as its rapid recent growth, the agency said.

The outlook revision also reflects news that Ginnie Mae is removing restrictions on Freedom from pooling VA single family guaranteed loans in Ginnie Mae multi-issuer securities, Moody's explained.

S&P lifts NH Hotel, view to stable

S&P said it revised NH Hotel Group SA's stand-alone credit profile to B+ from B as a result of NH Hotel's solid performance, continuous de-leveraging and substantial free operating cash flow generation.

The agency also said it affirmed the company's issuer credit rating at B and revised its outlook to stable, reflecting the application of the group rating methodology.

S&P also said it affirmed the BB- rating on NH Hotel's senior secured notes.

The ratings changes follow Minor International's completed debt-funded acquisition of NH Hotel Group, bringing its total stake in the company to 94.1%, the agency explained.

The stable outlook is based on an expectation that Minor will be able to refinance the largest part of its bridge loan by the end of first-quarter 2019 and the remaining bridge loan in the second-quarter of 2019, S&P said.

The ratings reflect a view that the company is now an integral part of Minor group's strategy given that it contributes 45% of the group's EBITDA, the agency said.

S&P upgrades Univar, rates loan BB+

S&P said it raised the issuer credit rating on Univar USA Inc. to BB from BB- and raised all of the issue-level ratings by one notch as well.

The recovery ratings on the company's debt are unchanged.

S&P said it assigned a BB+ rating and 2 recovery rating to the proposed senior secured term loan.

The outlook is stable.

Univar Inc. is issuing a €675 million senior secured term loan through subsidiary Univar USA, which, along with an equity issuance and draws on the company's revolving credit facilities, will fund the $2 billion acquisition of Nexeo Solutions LLC.

The agency said it anticipates the acquisition and subsequent divestiture of Nexeo's plastics business will be roughly leverage neutral.

The upgrade reflects an expectation for continued improvement in Univar's operating results and credit measures, S&P said.

The upgrade also considers Univar's continued improvement in EBITDA margins, driven by a combination of pricing initiatives, enriched product mix and cost reduction efforts, the agency said.

The company's stronger operating results have improved credit measures with funds from operations-to-debt of 16% for the 12-month period that ended September 2018, compared to 12% for the same period last year, S&P said.

Moody's upgrades Univar

Moody's Investors Service said it upgraded the corporate family rating of Univar Inc. to Ba3 from B1 to reflect the improvement to Univar's credit profile expected from the acquisition of Nexeo Solutions, LLC.

The acquisition is expected to close in the first quarter of 2019.

Moody's also upgraded the senior secured term loan B rating to Ba3 (LGD 4) from B1 (LGD 4) and assigned a Ba3 (LGD 4) rating to the new term loan B, along with upgrading the senior unsecured rating to B2 (LGD 5) from B3 (LGD 5).

The company's improved credit profile reflects a divestiture of Nexeo's plastics business with net proceeds used to reduce debt and improve post-acquisition leverage, the agency said.

The Nexeo acquisition has received regulatory approvals in the United States, Canada and the European Union with remaining approvals pending in two other jurisdictions, which the company believes is not expected to hold up the transaction, Moody's said.

The transaction requires Univar shareholder approvals with the vote expected later this month, the agency noted.

This action concludes a review for upgrade that began in September 2018, prompted by the acquisition news, Moody's said.

Univar's SGL-2 speculative grade liquidity rating was affirmed and the outlook is stable.

The combination of Univar and Nexeo is strategically sound, strengthens Univar's business profile and will create a global leading distribution company with $12.7 billion in revenues, the agency said.

Pro forma gross adjusted leverage is expected to be in the mid-4x range at closing, but the sale of Nexeo's plastics segment will further reduce debt and improve leverage closer to 4x, Moody's said.

The ratings also reflect the company's still moderately high leverage, challenges to organic topline and margin growth, the agency said, and a historically active bolt-on acquisition strategy that may occasionally stress leverage.

Fitch rates Univar loans BB+, notes BB

Fitch Ratings said it assigned a first-time long-term issuer default rating of BB to Univar Inc.

Fitch also said it assigned a BB+ with recovery rating of RR1 to the company's senior secured ABL facilities and term loans, along with a BB rating and RR4 recovery rating to its senior unsecured notes.

The outlook is positive.

The ratings reflect Univar's market position in chemicals and ingredients distribution, flexible and scalable operating model, consistent and improving profit margins, considerable free cash flow generation and expectations of net leverage to be within a 3x to 3.5x target range by 2020, the agency said.

Univar consistently generates solid margins and free cash flow despite its exposure to some cyclical end markets, Fitch said.

The company's continued progress in executing its strategic priorities and adherence to its capital deployment priorities also should also help further reduce cash flow and financial risks, the agency said.

Moody's upgrades Adient Global

Moody's Investors Service said it upgraded Adient Global Holdings Ltd.'s speculative grade liquidity rating to SGL-3 from SGL-4.

Moody's also said it affirmed Adient's corporate family rating at B2 and probability of default rating at B2-PD, along with its senior secured ratings at Ba2 (LGD 2) and senior unsecured ratings at B3 (LGD 4).

The outlook remains negative.

The upgrade reflects the company's recent amendment to the financial maintenance covenants under its senior secured credit facilities to provide additional covenant cushion that supports operating flexibility over the next 12- to 15-months, Moody's explained.

The additional flexibility is credit positive, but Moody's said it affirmed the other ratings because continued operating performance deterioration and broad management changes reflect cost and launch execution challenges that will take time and significant effort to overcome.

This is expected to lead to sustained weaker credit metrics and negative free cash flow beyond fiscal 2019, the agency said.

The ratings also reflect Adient's position as a leading global supplier of automotive seating and related components, but also its high leverage and cyclical end-market demand, Moody's said.

Moody's upgrades Caleres

Moody's Investors Service said it upgraded Caleres, Inc.'s speculative grade liquidity rating to SGL-2 from SGL-3.

Moody's also said it affirmed the company's Ba2 corporate family rating, Ba2-PD probability of default rating and Ba3 (LGD 5) rating on its $200 million senior unsecured notes due 2023.

The outlook remains stable.

The change in the speculative grade liquidity rating to SGL-2 from SGL-3 reflects the maturity extension of its asset based revolving credit facility to January 2024 from December 2019, albeit with a smaller capacity of $500 million down from $600 million.

The ratings reflect an expectation that revolver repayment will drive an improvement in Caleres' leverage and interest coverage over the next 18 months to levels that are in line with a Ba2 corporate family rating, Moody's said.

However, the increase in share repurchases and the corresponding slower-than-anticipated revolver repayment will modestly delay the pace of credit metric improvement, the agency said.

The ratings reflect the company's recognized brands, solid execution and geographic diversification, Moody's said.

The ratings are constrained by its low margins relative to specialty retail peers, narrow product focus and sensitivity to shifts in fashion and consumer discretionary spending, the agency said.

S&P upgrades Chesapeake Energy

S&P said it raised the issuer credit rating on Chesapeake Energy Corp. to B+ from B, along with its senior unsecured debt rating to B+ from B-.

The upgrades reflect both the improved recovery prospects following repayment of its second-lien notes, as well as the higher issuer credit rating.

The agency also said it assigned a B+ issuer credit rating to Brazos Valley Longhorn LLC, a wholly owned unrestricted subsidiary of Chesapeake and successor to WildHorse Resources Development Corp.

S&P also said it affirmed the ratings on WildHorse and withdrew the issuer credit rating as it merged into Brazos.

Brazos will hold the WildHorse assets and was made the issuer of WildHorse's $700 million senior notes, the agency said.

The upgrade on Chesapeake also considers the increased scale of its Eagle Ford assets, creating a large core position in the area and meaningfully increasing the oil content and profitability of its production and reserves, S&P said.

The outlooks on Chesapeake and Brazos are stable, reflecting an expectation that Chesapeake will maintain a modest financial policy that supports liquidity and its improved financial performance, S&P said.

S&P upgrades OneMain, Springleaf

S&P said it raised the issuer credit rating on OneMain Holdings Inc. to BB- from B+, along with its rated subsidiary Springleaf Finance Corp. to BB- from B+.

The agency also said it raised the ratings on Springleaf's senior unsecured debt to BB- and AGFC Capital Trust preferred stock to B-.

The outlook is stable.

The stable outlook reflects an expectation that OneMain will continue to lower leverage while maintaining its existing funding mix and similar net charge-off rates.

The upgrades reflect an expectation that OneMain will lower leverage to 4.5x to 4.75x debt-to-adjusted total equity on a sustained basis while net charge-offs remain at less than 6.5%, S&P said.

Since the Springleaf acquisition of OneMain in 2015, the company has retained its earnings to build equity, not paid any dividend and reduced leverage to its target of 7x, S&P explained.

In 2019, OneMain plans to use part of excess cash flows to pay an annual dividend of about $135 million and reduce leverage toward the management target of 6x, the agency said.

Moody's upgrades OneMain, Springleaf

Moody's Investors Service said it upgraded OneMain Holdings, Inc.'s corporate family rating to B2 from B3 and Springleaf Finance Corp.'s senior unsecured debt rating to Ba3 from B1.

The outlook is stable.

Moody's also withdrew the outlooks on all of OneMain's, Springleaf Finance's and AGFC Capital Trust I's existing instrument ratings for its own business reasons.

The upgrades reflect the significant progress OneMain Holdings has made in de-leveraging, improving its liquidity profile and achieving strong profitability since the acquisition of OneMain Financial Holdings, LLC in November 2015, the agency explained.

OneMain Holdings has continued to strengthen its liquidity and funding profile by prepaying and further laddering debt maturities, Moody's said, as well as by increasing the availability under its credit facilities and extending their maturities.

Moody's may downgrade Prospect Medical

Moody's Investors Service said it placed on review for downgrade all of Prospect Medical Holdings, Inc.'s ratings, including its B2 corporate family rating, B2-PD probability of default rating and the B1 (LGD 3) rating on its senior secured first-lien term loan due 2024.

The review for downgrade reflects the recent spike in Prospect's financial leverage and the company's weakened liquidity profile, Moody's said.

The company's debt-to-EBITDA ratio increased to nearly 7x for the 12-month period that ended Sept. 30, 2018, up from 4.1x for the 12-month period that ended June 30, 2018, the agency said.

While the drop in EBITDA for the September period may be temporary, the company has failed to de-leverage in-line with expectations at the time of the debt-funded sponsor dividend in early 2018, Moody's said.

De-leveraging has been challenged by a combination of weak operating performance at certain previously acquired facilities and longer-than-expected delays to receive California Quality Assurance Fee reimbursement payments, the agency said.

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