Fitch downgrades Jones Energy

Fitch Ratings said it downgraded the long-term issuer default ratings of Jones Energy Holdings LLC and Jones Energy, Inc. to D from C.

Fitch also said it affirmed the ratings on the first-lien notes at CC with recovery rating of RR3 and the senior unsecured notes at C with recovery rating of RR6.

This follows news that the company has filed for bankruptcy in a pre-arranged Ch. 11 case with the U.S. Bankruptcy Court for the Southern District of Texas in Houston, Fitch explained.

The company entered into a restructuring support agreement with holders of about 92% in principal of its first-lien notes and 83% of the unsecured notes in which it plans to equitize about $1 billion of funded debt, the agency said.

The court has set a deadline to vote to accept the plan May 1, Fitch said, and Jones expects to emerge from bankruptcy 14 days following confirmation of the plan.

The restructuring support agreement follows negotiations with note holders that began in February 2018, the agency said.

Holders of the 9¼% first-lien notes due 2023 are expected to receive 96% of new common equity while the 9¼% of 2023 and the 6¾% of 2022 unsecured notes will receive 4% of new common equity, plus new warrants exercisable for up to 15% equity stake.

Certain consenting parties have agreed to provide Jones with an exit financing term loan facility, Fitch said.

The loan will be in the form of a senior secured delayed draw term loan in an aggregate principal amount of up to $20 million.

The agreement also allows Jones to obtain alternative exit financing in lieu of the term loan in an aggregate principal amount of up to $150 million, the agency added.

The restructuring reflects Jones declining production profile, an inability to access capital to develop its reserves, a prolonged period of low commodity prices and minimal liquidity, Fitch explained.

S&P downgrades Bristow

S&P said it downgraded Bristow Group Inc. to D from CCC-.

Bristow announced that it has elected not to make an interest payment on its 6.25% unsecured notes due 2022.

The company has also engaged restructuring advisors to explore its strategic alternatives.

The 5 recovery rating on the company's unsecured debt and 1 recovery rating on its secured notes are unchanged.

The 5 recovery rating indicates 10% to 30% expected default recovery.

The 1 recovery rating indicates 90% to 100% expected default recovery.

The downgrade reflects Bristow's decision to exercise its 30-day grace period after electing not to make the interest payment, S&P said.

The company also announced that it has entered into temporary waiver agreements with its lenders in order to avoid defaulting on its asset-backed loan and equipment loans because of the missed interest payment, the agency said.

The company has been struggling with constrained liquidity, high leverage and weak operating trends in addition to its unresolved financial reporting issues, S&P said.

The agency said it believes the company will likely reorganize under Ch. 11 rather than make the interest payment prior to the expiration of its grace period.

DBRS lowers First Capital unsecured notes

DBRS said it downgraded the rating of First Capital Realty Inc.’s senior unsecured debentures to BBB from BBB (high) following the closing of the company’s debt-financed repurchase for cancellation of C$742 million common shares from Gazit-Globe Ltd.

This action resolves negative review status on the company that began in March, DBRS said.

The agency said it is changing the status to "developing" review until it reviews legal documentation evidencing First Capital’s previously announced conversion to a real estate investment trust.

The downgrade reflects First Capital’s elevated leverage as measured by a total debt-to-EBITDA ratio that is expected to peak at 11.6x immediately following close of the share repurchase transaction, DBRS said.

The ratings are supported by the company’s stable portfolio of supermarket- and drugstore-anchored retail properties, leading market position within its core trade areas, resilient tenant base, development capabilities and low proportion of secured debt, the agency said.

S&P upgrades Covivio

S&P said it raised the long-term rating on Covivio to BBB+ from BBB, affirmed its A-2 short-term rating and raised the group's senior unsecured debt to BBB+ from BBB.

Covivio continues to expand its pan-European portfolio in terms of size, geographies and asset classes, reinforcing its strong business profile, S&P said.

Covivio has some headroom under its new tightened financial policy to accommodate growth opportunities and maintain a debt-to-debt plus equity ratio well within 45% to 50% and EBITDA interest coverage comfortably higher than 3x, the agency said.

The stable outlook reflects an expectation that Covivio should be able to maintain credit measures commensurate with a BBB+ rating throughout the cycle, S&P said.

The upgrades reflect the benefit of a tightened financial policy that will allow for growth opportunities while maintaining credit metrics commensurate with the higher rating, the agency said.

The stable outlook reflects an expectation that Covivio should be able to maintain ratings-commensurate credit measures throughout the cycle, S&P said.

S&P upgrades Swiss Life

S&P said it upgraded the financial strength and issuer credit ratings on the core operating entities of Swiss Life Group to A+ from A.

The agency also said it assigned an A+ long-term foreign-currency issuer credit rating to Swiss Life AG, reflecting the outstanding foreign-currency-denominated debt.

S&P also raised to A- from BBB+ the issuer credit ratings on the group's holding company, Swiss Life Holding AG.

The agency also raised to A- from BBB+ the issue ratings on Swiss Life Holding's senior bonds and Swiss Life AG's junior subordinated bonds.

The outlook is stable.

Swiss Life has consolidated its sound capital position, reducing capital and earnings volatility and demonstrated strong enterprise risk management, S&P said.

The insurer also sustained a track record of strong earnings on the back of business growth and diversification, notably within third-party asset management and other fee income, the agency said.

Fitch assigns C rating to MIE notes

Fitch Ratings said it downgraded MIE Holdings Corp.'s long-term issuer default rating to RD (restricted default) from C on the completion of MIE's exchange offer.

Fitch also said it reassessed and upgraded the issuer default rating to CC post completion of the exchange.

The rating on MIE's outstanding untendered $50.665 million 7½% senior unsecured bonds due April 25 were affirmed at C with recovery rating of RR6.

Fitch also said it assigned a C rating with a recovery rating of RR6 on MIE's $248.394 million 13¾% senior notes due April 2022, which were issued arising from the exchange offer.

The rating actions are in accordance with the agency's distressed debt exchange (DDE) rating criteria, Fitch noted.

The CC rating reflects MIE's significant challenges to liquidity and limited financial flexibility, the agency said, as cash generation is unlikely to cover short-term debt maturities and interest obligations.

S&P rates Gogo notes CCC+

S&P said it affirmed the CCC+ issuer credit rating on Gogo Inc. and assigned a CCC+ issue-level rating to the company's proposed $900 million senior secured notes due in 2024.

Gogo's proposed refinancing of its capital structure will boost its short-term liquidity by extending the maturity profile of its obligations, but it expects the company to burn cash over the next year, S&P said.

The outlook is negative.

The agency said it does not envision a default within the next year.

The negative outlook reflects the possibility of a downgrade over the next 12 months should the cash burn accelerate, S&P said.

The ratings reflect a view that the proposed refinancing is favorable as it removes $162 million of maturities due in 2020, significantly reducing the likelihood of a default over the next 12 months, the agency said.

Furthermore, the $188 million cash balance as of the first quarter of 2019 was higher than expected, which allows the company more time to execute its growth plan to continue to build scale in the commercial aviation business, S&P said.

The agency said it believes a portion of the improvement was due to temporary working capital swings.

S&P also continues to recognize execution risk associated with cost-cutting initiatives amid a growth phase in which the company competes aggressively to win new business and improve its brand reputation.

S&P rates Sika eurobond A-

S&P said it assigned an A- rating to Sika Capital BV's €1 billion eurobond expected to be issued this month.

The proposed bond is made of two series, comprising €500 million 2027 notes and €500 million 2031 notes.

The issues will be unconditionally and irrevocably guaranteed by Sika AG, S&P said.

The proceeds will support the CHF 2.5 billion financing of Sika's acquisition of construction chemicals company Parex, which was announced in January, the agency said.

The acquisition also is supported by Sika's CHF 1.3 billion mandatory convertible bond issued in January 2019, which is assessed as having high equity content, S&P said.

Following the issuance of the eurobond, the agency said it expects the bridge facility secured with banks to fund the acquisition will be fully canceled.

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