Fitch downgrades Accor

Fitch Ratings said it downgraded Accor SA’s long-term issuer default rating to BB+ from BBB-.

“The downgrade reflects the longer-than-expected impact of the global pandemic on Accor’s credit profile. This is exacerbated by the resurgence of second waves of infections, especially in Europe, and higher-than-anticipated RevPAR (revenue per available room) sensitivity, which is accentuating operating losses. New traveling restrictions are disrupting operations and, despite several cash-preservation measures and Accor’s predominantly economy positioning (mainly through Ibis), increased cash burn will keep leverage metrics above 5x until 2022,” Fitch said in a press release.

The outlook is stable.

S&P cuts Bahia De Las Isletas

S&P said it lowered its ratings on Bahia De Las Isletas SL and its core subsidiary Naviera Armas SA, on whose level the senior secured notes were issued, to SD from B-. Concurrently, the agency downgraded the ratings on its senior secured notes due 2023 to D and on the senior secured notes due 2024 to CC, maintaining the recovery rating at 3.

Bahia missed the Oct. 31 coupon payment on its senior secured notes due 2023.

“We do not expect the company will make this payment during a 30-day grace period despite sufficient liquidity sources, as per our estimates. Bahia is in discussions with noteholders to evaluate alternatives in restructuring its capital structure, including the senior secured notes. Therefore, we view it unlikely that Bahia will make the upcoming Nov. 17 coupon payment on its 2024 senior secured notes,” S&P said in a press release.

It’s the agency’s understanding, Bahia is current on its other debt obligations, S&P said.

Moody’s downgrades Ensign

Moody’s Investors Service said it downgraded Ensign Drilling Inc.’s corporate family rating to Caa1 from B3, probability of default rating to Caa1-PD/LD from B3-PD, senior unsecured rating to Caa2 from Caa1 and speculative grade liquidity rating to SGL-4 from SGL-3.

“Moody’s views Ensign’s cumulative repurchase of $152 million of notes in 2020 for a gain on repurchase of $92 million as a distressed exchange, which Moody’s views as a default. Accordingly, an /LD (limited default) designation has been appended to Ensign’s PDR, indicating that a limited default has occurred. This designation will be removed within a few business days,” the agency said in a press release.

The outlook remains negative.

Moody’s trims Heathrow Finance

Moody’s Investors Service said it downgraded to Ba2 from Ba1 the corporate family rating of Heathrow Finance plc.

Concurrently, Moody’s also downgraded to Ba3-PD from Ba2-PD the probability of default rating and to B1 from Ba3 the senior secured debt ratings.

“The rating downgrade reflects a persistently difficult operating environment for Heathrow airport as evidenced by the weaker than anticipated pace of passenger demand recovery due to travel restrictions and quarantine measures in 2020, and Moody’s expectation that the breadth and severity of the coronavirus outbreak will lead to slower than previously anticipated traffic recovery,” Moody’s said in a press release.

The outlook on the ratings remains negative.

S&P trims Masmovil Ibercom

S&P said it downgraded Masmovil Ibercom SA rating to B+ from BB- after Lorca Telecom Bidco SAU completed its takeover.

The agency also removed the rating from CreditWatch with negative implications and assigned a stable outlook. The outlook mirrors Lorca’s stable outlook, S&P said.

Moody’s trims Service Properties

Moody’s Investors Service said it downgraded Service Properties Trust’s ratings, including its corporate family rating to Ba2 from Ba1 and its guaranteed and non-guaranteed senior unsecured ratings to Ba1 and Ba2, from Baa3 and Ba1, respectively. The speculative grade liquidity rating remains unchanged at SGL-3.

“The ratings downgrade reflects further changes to SVC’s capital structure, with the company amending its credit agreement to extend financial covenant waivers through July 2022 and to deliver first-lien mortgages on 74 properties totaling approximately $1.84 billion in aggregate gross book value in order to secure obligations under the agreement. Moody’s expects that the company will continue to use secured debt financing to fund capital needs on a go-forward basis,” the agency said in a press release.

The outlook remains negative.

S&P cuts Third Coast Midstream

S&P said it lowered its rating on Third Coast Midstream LLC to CCC+ from B- and its senior unsecured notes to B- from B. The 2 recovery rating on the debt, indicating expectations for substantial (70%-90%; rounded estimate: 85%) recovery in the event of a payment default, is unchanged.

The agency also revised the CreditWatch with negative implications to developing.

“The downgrade reflects the company’s refinancing risks and our belief that a default could occur in the next 12 months. Third Coast Midstream has extended the maturity of its revolving credit facility to Sept. 15, 2021, or 91 days before the maturity of its senior unsecured notes. Despite its successful revolver maturity extension, we believe that the company has limited time and liquidity to refinance its senior unsecured notes, which mature in December 2021,” S&P said in a press release.

The CreditWatch reflects that S&P could lower its rating on Third Coast if it fails to refinance its senior unsecured notes due December 2021 in the near term. “Alternatively, we could raise our rating on the company if it successfully refinances its senior unsecured notes,” S&P said.

S&P cuts UPC secured notes

S&P said it downgraded UPC Holding BV’s senior secured debt rating to B- from B and removed it from CreditWatch with negative implications.

Concurrently, S&P affirmed UPC’s BB- long-term issuer credit rating on as well as the B rating on its unsecured debt. The agency also affirmed the BB- rating on the recently issued senior secured credit facilities, with a recovery rating of 3 (65%).

After UPC’s parent Liberty Global’s acquisition of Sunrise, S&P said it sees UPC keeping a highly leveraged capital structure for the next two to three years.

“The acquisition of Sunrise was funded by about €3 billion of senior secured term loans, including expected refinancing of Sunrise’s outstanding debt. This brings the group’s reported net debt to EBITDA ratio to about 5x excluding related party fees, and about 5.6x-5.7x on an S&P Global Ratings-adjusted basis,” the agency said in a press release.

The outlook is stable.

S&P cuts Washington Prime

S&P said it downgraded its rating on Washington Prime Group Inc. to CC from CCC and its unsecured debt to C from CCC-. The unsecured debt’s 5 recovery rating remains unchanged and the agency affirmed the preferred stock rating at C.

“The downgrade reflects the strong likelihood of a technical default in the near term. WPG has announced it is actively negotiating specific measures with its existing debt investors that, if successful, would allow it to deleverage its balance sheet. If the company completes such a transaction, we would view it as tantamount to a default because it will most likely result in its lenders receiving less than they were promised under the original securities,” S&P said in a press release.

The outlook is negative.

Moody’s ups IRB, rates loans B2

Moody’s Investors Service said it upgraded IRB Holding Corp.’s corporate family rating to B2 from B3 and the probability of default rating to B2-PD from B3-PD. Moody’s also upgraded IRB’s senior secured bank ratings to B2 from B3, senior secured notes rating to B2 from B3 and senior unsecured notes rating to Caa1 from Caa3.

In addition, Moody’s assigned a B2 rating to IRB’s proposed incremental $2.58 billion senior secured term loan and $250 million incremental senior secured revolver. Moody’s revised the outlook to stable from negative.

IRB is acquiring Dunkin’ Brands Group Inc. for about $11.3 billion.

“The upgrade reflects the significant additional scale, diversity and cash flows that will come from the acquisition of Dunkin’ as well as improving operating trends at IRB’s existing brands,” stated Bill Fahy, a Moody’s senior credit officer, in a press release.

“Despite these benefits, the rating is constrained by governance considerations particulary financial strategies given the very high initial pro forma leverage at around nine times which is expected to improve over the next 12 to 18 months as operating performance improves and excess cash flows are used to repay restricted group debt over and above required amortization,”added Fahy.

S&P puts Clearwater Seafoods on positive watch

S&P said it placed its ratings on Clearwater Seafoods Inc., including the B issuer credit rating, on CreditWatch with positive implications.

The CreditWatch placement follows Premium Brands Holdings Corp.’s announcement that it will acquire Clearwater through a partnership with First Nation Communities for equal equity ownership.

“We expect the acquisition to be credit positive, given PBH’s greater revenue and EBITDA scale and product diversity compared with those of Clearwater. We also believe the acquisition will provide Clearwater access to PBH’s customer relationships in Canada and the U.S.,” S&P said in a press release.

After closing the transaction and possible repayment of Clearwater’s debt, S&P said it might either resolve the CreditWatch placement or discontinue the ratings, S&P said.

S&P revises Crestwood view to negative

S&P said it revised the outlook for Crestwood Holdings LLC to negative from stable but affirmed its B- ratings on the company and its issues. The 3 recovery rating is unchanged.

“The rating action on Holdings reflects our expectation that its master limited partnership (MLP), CEQP, will maintain its distribution over the coming quarters. We previously expected distribution growth in 2021. In our view, CEQP’s equity yield of 17%-18% is unsustainable over the long term and would limit any distribution increases unless its unit price improves,” S&P said in a press release.

The agency said it forecasts a financial covenant violation next year unless the company can amend them.

S&P puts ITT on watch

S&P said it placed its BB issuer rating on ITT Holdings LLC on CreditWatch with negative implications after its parent reported plans to sell the company for about $2.69 billion to an affiliate of Riverside Holdings LLC. S&P also placed ITT’s senior unsecured rating on watch.

“Pro forma for the transaction, IMTT’s financial policy will be determined by Riverstone, which we consider a financial sponsor. We think financial sponsors are more likely to use leverage to fund transactions and, more generally, increase financial returns. As a result, ratings are generally lower for financial sponsor owned-companies in comparison to strategically owned companies,” S&P said in a press release.

S&P puts Macquarie Infrastructure on watch

S&P said it placed Macquarie Infrastructure Corp.’s BB issuer and senior unsecured debt ratings on CreditWatch with negative implications. The recovery rating remains 3 (65%).

The placement follows Macquarie reporting it agreed to sell its ITT Holdings LLC unit for $2.69 billion. Macquarie plans to repay holdco debt and pay a special distribution with the proceeds.

“We based the Creditwatch placement on our expectation that, pro forma for the transaction, MIC will derive most of its cash flows from Atlantic Aviation FBO Inc., which has a ‘b’ stand-alone credit profile, while it will derive about 20% of EBITDA from Hawaii Gas (not rated),” S&P said in a press release.

S&P gives Tendam Brands negative view

S&P said it removed Tendam Brands SAU’s ratings from CreditWatch with negative implications and assigned a negative outlook. The agency placed the ratings on negative watch on April 7.

“Tendam’s leverage is expected to be very high for its rating level in FY2021 in the context of its negative FOCF generation. We expect S&P Global Ratings-adjusted debt to EBITDA to increase to 7.5x-8.5x in FY2021 and an EBITDAR coverage ratio of 0.9x-1x, given the high lease expense burden. For FY2022, we project the company will reduce leverage toward 5x – as earnings slowly recover and assuming Tendam does not incur further debt – and EBITDAR will improve toward 1.2x-1.3x,” S&P said in a press release.

The agency also affirmed its B ratings on the company and its issues and the BB- rating on its super senior revolving credit facility.

Moody’s moves Avison Young view to stable

Moody’s Investors Service said it revised the outlook on Avison Young (Canada) Inc. to stable from positive. Moody’s also affirmed all of Avison Young’s ratings, including its B2 corporate family rating and its B2 senior secured bank credit facility rating.

“The ratings affirmation and outlook revision to stable from positive, reflect Avison Young’s weakened operating performance in the current environment and failure to maintain leverage and coverage metrics post the GVA transaction. The company’s leverage has increased above expectations, with debt to EBITDA at 4.4x for the last 12- month period ended June 30, 2020,” Moody’s said in a press release.

A reduction in business activity and a material decline in leasing and capital markets transaction volumes, including average deal size and tenure, due to the pandemic have hurt Avison’s revenue streams, the agency said. “The potential for continued earnings and revenue erosion due to the deterioration in the macroeconomic environment has increased with the continued spread of the coronavirus and a prolonged recovery into 2021 or beyond could put further pressure on the company’s earnings and weaken leverage ratios above current levels,” Moody’s said.

Moody’s moves VodafoneZiggo view to stable

Moody’s Investors Service said it changed the outlook to stable from negative and affirmed VodafoneZiggo Group BV’s B1 corporate family rating and B1-PD probability of default rating.

Concurrently, Moody’s affirmed the B1 instrument rating on Ziggo Financing Partnership’s senior secured term loan I due and on Ziggo BV’s senior secured term loan H due 2029, the senior secured revolving credit facility due 2026, the senior secured notes due 2027 and 2030.

Moody’s also affirmed the B2 senior unsecured rating on the vendor financing notes due 2024 issued by VZ Vendor Financing BV and the B3 senior unsecured rating on the senior notes due 2027 and 2030 issued by Ziggo Bond Co. BV.

The agency revised the outlooks to stable from negative for all other entities except Ziggo Financing Partnership. Moody’s assigned a stable outlook to Ziggo Financing Partnership, which had no outlook previously.

The outlook reflects an improved operating performance, the company’s strengthening business profile supported by the successful fixed-mobile convergence, which has contributed to significantly increasing customer stickiness, and the improved market environment in mobile following the acquisition of Tele2 Netherlands by T-Mobile Netherlands, Moody’s said.

S&P revises Warrior Met Coal view to stable

S&P said it revised the outlook for Warrior Met Coal Inc. to stable from positive and affirmed all its ratings on Warrior, including the B+ issuer rating.

“The stable outlook reflects our expectation that average seaborne metallurgical coal prices will improve by about 15% in 2021, supporting a doubling of EBITDA to about $230 million next year,” S&P said in a press release.

S&P rates Charter NEX facilities B

S&P said it assigned Charter Nex US Inc.’s planned $1.7 billion of senior secured credit facilities a B rating with a 3 recovery rating. The facilities consist of a $100 million revolving facility due 2025 and a $1.6 billion term loan B due 2027.

Charter is also selling $500 million of privately placed senior unsecured payment-in-kind toggle notes due 2028, which S&P is not rating.

Proceeds will be used to recapitalize the company’s structure, extend maturities and pay a shareholder distribution.

S&P also affirmed the company’s B rating but changed the outlook to negative from stable. “The negative outlook reflects the one-in-three potential for lower ratings if market conditions or financial policies render the company unable or unwilling to reduce its debt leverage, which will rise to over 7x following this transaction,” the agency said in a press release.

Moody’s assigns Chemours notes B1

Moody’s Investors Service said it assigned a B1 rating to $750 million in new senior unsecured notes due 2028 by the Chemours Co.

“The refinancing prudently repays the nearest maturity in 2023, extending to 2025 the company’s next maturing debt and lowering the company’s cost of debt capital with lower coupon debt,” according to Joseph Princiotta, a Moody’s senior vice president and lead analyst for Chemours, in a press release.

Proceeds and balance sheet cash are expected to be used to refinance $908 million of Chemours’ outstanding 6 5/8% senior notes due 2023.

The outlook remains negative.

Fitch rates Encore notes BB+

Fitch Ratings said it assigned Encore Capital Group, Inc.’s proposed £250 million issue of senior secured notes an expected rating of BB+.

The expected rating is equalized with Encore’s long-term issuer default rating. The equal rating reflects the prior claim on available security of a higher-ranking super-senior debt level, which results in Fitch expecting average rather than above-average recoveries for Encore’s senior secured notes, the agency said.

“Under Encore’s recently implemented global funding structure, senior secured notes issued by Encore and Cabot Financial (Luxembourg) SA rank equally with each other as senior secured obligations, guaranteed by most Encore subsidiaries. Therefore, the refinancing has no net impact on consolidated leverage or on the relative rank of the new notes,” Fitch said in a press release.

Proceeds are expected to be used principally to repay an equivalent sum of other notes due 2023 issued by Encore’s subsidiary Cabot Financial (Luxembourg) SA.

S&P rates IRB loan B

S&P said it assigned a B rating to the planned incremental $2.58 billion first-lien term loan of IRB Holding Corp. (Inspire) to help it fund the acquisition of Dunkin’ Brands Group, Inc.

The agency also affirmed IRB’s B issuer rating, removed it from CreditWatch with positive implications and assigned a positive outlook.

“The positive outlook reflects our view that integrating Dunkin’ into the Inspire platform could lead to a higher rating as the pace and sustainability of credit metric improvement becomes clearer,” S&P said in a press release.

The agency affirmed the B rating on Inspire’s other senior secured facilities but revised the recovery rating to 3 from 4. Also, S&P affirmed the CCC+ and 6 recovery rating on Inspire’s unsecured notes.

Moody’s assigns NatWest notes Ba2

Moody’s Investors Service said it assigned a Ba2(hyb) rating to the £1 billion high-trigger additional tier 1 securities’ reset perpetual subordinated contingent convertible additional tier 1 capital notes issued by NatWest Group plc.

“NatWest Group’s AT1 securities are perpetual deeply subordinated instruments; coupons may be canceled in full or in part on a non-cumulative basis at the issuer’s discretion or mandatorily. If NatWest Group’s consolidated fully-loaded common equity tier 1 (CET1) capital ratio falls below 7%, the securities will be permanently converted in whole into ordinary shares of NatWest Group,” Moody’s said in a press release.

Fitch rates Pacific Gas bonds BBB-

Fitch Ratings said it assigned a BBB-'RR1 rating to Pacific Gas and Electric Co.’s floating rate, 364-day first mortgage bonds due 2021. PG&E’s Issuer Default Rating (IDR) is BB/stable. The company is a subsidiary of PG&E Corp.

“The rating reflects considerable credit risk associated with potential catastrophic wildfires sparked by utility equipment further complicated by the reputational risk associated with the utility’s poor safety record,” Fitch said in a press release.

S&P rates Tenneco notes B

S&P said it assigned a B rating with 3 recovery rating to Tenneco Inc.’s planned $500 million of senior secured notes due 2029.

“We believe the recovery in global light vehicle demand and Tenneco’s ongoing cost-reduction efforts will continue to boost profitability and free cash flow generation. Tenneco outperformed our expectations for the third quarter in terms of both profitability and free cash flow,” the agency said in a press release.

S&P said it also revised the outlook to positive from negative, reflecting the view Tenneco’s free operating cash flow (FOCF)-to-debt ratio will stay above 3% in the next 12 months.

Moody’s assigns Tenneco notes Ba3

Moody’s Investors Service said it assigned a Ba3 rating to Tenneco Inc.’s proposed $500 million of senior secured notes.

Tenneco’s other ratings, including the corporate family and probability of default ratings at B2 and B2-PD, respectively, the existing senior secured debt rating at Ba3 and senior unsecured debt rating at Caa1 are all unaffected, the agency said.

The proceeds from these notes, along with a nominal amount of cash on hand, will be used to redeem the €415 million of 4 7/8% fixed-rate senior secured notes due 2022 and pay the related call premiums, fees and expenses.

The outlook is stable.

Fitch rates Tenneco notes BB

Fitch Ratings said it assigned BB/RR2 ratings to Tenneco Inc.’s proposed issuance of $500 million in senior secured notes due 2029.

The same collateral that secures Tenneco’s senior secured notes and its senior secured credit facility will secure the new notes.

Proceeds will be used to redeem the company’s €415 million of 4 7/8% senior secured notes due 2022.

“The refinancing of the senior secured notes will help to de-risk TEN’s balance sheet by shifting an intermediate-term maturity further into the future while having a minimal effect on the company’s leverage,” Fitch said in a press release.

Tenneco’s long-term issuer default rating is B+, and its outlook is negative.

S&P slashes HighPoint Resources

S&P said it slashed its ratings on HighPoint Resources Corp. to CC from CCC+ and its unsecured notes to C from CCC.

The downgrade follows the announcement HighPoint entered into a transaction with Bonanza Creek. Under the terms, all outstanding debt maturities would be exchanged for Bonanza Creek common stock, par value $0.01 per share, and senior unsecured notes of up to $100 million to be issued by Bonanza Creek in connection with the exchange offer, S&P said.

“In our view, this transaction as proposed is distressed as HighPoint debtholders would not receive what they were originally promised. The restructuring agreement requires 97.5% of HighPoint debtholders to agree to the transaction,” S&P said in a press release.

If the proposal fails, HighPoint will voluntarily file for Chapter 11 bankruptcy protection to complete the 100% debt-for-equity conversion, the agency said.

The outlook is negative.

S&P gives Lorca Telecom B+

S&P said it assigned B+ ratings to Lorca Telecom Bidco SAU, its €2.2 billion senior secured term loan B and €800 million senior secured bond. The recovery rating on the debt is 3.

Lorca used the proceeds and equity financing to acquire MasMovil’s shares and repay its debt. Lorca delisted MasMovil’s shares on Nov. 3.

The outlook is stable. “The stable outlook indicates that we expect MasMovil to continue quickly increasing revenues and EBITDA margin, allowing the group to reduce adjusted debt to EBITDA to 4.5x-4.6x in 2021 from 6.1x-6.2x in 2020, while free operating cash flow (FOCF) should break even in 2021,” S&P said in a press release.

S&P gives Pacific Gas bonds BBB-

S&P said it assigned its BBB- issue-level rating and 1+ recovery rating to Pacific Gas & Electric Co.’s $1.45 billion floating-rate senior secured first-mortgage bonds due Nov. 15, 2021. The 1+ recovery rating indicates the highest expectation of full recovery, resulting from significant overcollateralization (at least 150%) for lenders in the event of a payment default.

S&P said it expects the company will use the proceeds for general corporate purposes.

“All of our other ratings on the company are unchanged, including the BB- issuer credit rating,” the agency said in a press release.

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