Moody's downgrades Advanced Integration

Moody's Investors Service said it downgraded all of the debt ratings on Advanced Integration Technology LP, including its corporate family rating to B2 from B1, senior secured rating to B2 from B1 and probability of default rating to B3-PD from B2-PD.

The outlook was changed to stable from negative.

The debt ratings reflect a weaker and more volatile earnings and cash flow profile than anticipated, along with concerns around operational and financial execution that have significantly trailed expectations and resulted in a weakened credit profile, Moody's said.

The ratings also consider Advanced's modest size, relatively concentrated customer and platform base and its exposure to cyclical end markets, the agency said.

The company has a mixed track record of performance, much of which over the last two years can be attributed to losses in the non-core parts manufacturing business, Moody's said.

Partially tempering these issues is recognition of the company's growing portfolio of automation and engineering capabilities and expanded customer base, the agency said.

S&P downgrades E.W. Scripps

S&P said it lowered the issuer credit rating on E.W. Scripps Co. to B+ from BB- due to the elevated leverage.

The agency also said it lowered the rating on the company's existing senior secured revolving credit facility and term loan to BB from BB+ and lowered the rating on the company's senior unsecured notes to B+ from BB-.

All of the ratings remain on CreditWatch with negative implications.

E.W. Scripps has announced that it entered into an agreement to acquire a portfolio of TV stations from Nexstar Media Group for $580 million, S&P said.

This follows the company's pending acquisition of TV stations from Cordillera Communications for $521 million, the agency noted.

S&P said it expects both acquisitions will be funded with incremental debt, causing its adjusted pro forma average trailing-eight-quarter leverage to increase to 6.5x to 7x, well above the low-4x threshold for the BB- rating.

The agency said it will evaluate the combined station portfolio and assess the degree of execution risk associated with integrating multiple acquisitions.

Moody's downgrades Scripps

Moody's Investors Service said it downgraded E.W. Scripps Co.'s corporate family rating to B1 from Ba3 and probability of default rating to B1-PD from Ba3-PD.

Moody's also said it downgraded the rating on the company's senior secured bank credit facility to Ba3 (LGD 3) from Baa3 (LGD 2) and its senior unsecured notes to B3 (LGD 3) from B1 (LGD 3).

The senior secured bank credit facility includes the planned incremental term loan to fund the acquisition of Cordillera Communications.

The SGL-2 speculative grade liquidity rating also was affirmed.

The outlook is stable.

The action follows the news that the company entered into an exclusive agreement to acquire eight TV stations that are being divested as part of the Nexstar Broadcasting, Inc., Moody's said.

Scripps is planning to fund the acquisition through a $580 million term loan, which will be incremental to the $525 million term loan announced at the time of the Cordillera acquisition, the agency said.

The downgrades reflect an expectation that Scripps' two year average leverage will be well above 6x at year-end 2019, compared to guidance of 4.25x guidance for the Ba3 rating, Moody's said.

The ratings reflect the company's very high-margin retransmission fees, strong local news programming and audience share and good free cash flow generation, the agency said.

Moody's lowers SunOpta Foods

Moody's Investors Service said it downgraded SunOpta Foods Inc.'s corporate family rating to Caa1 from B3, probability of default rating to Caa1-PD from B3-PD and senior secured second-lien notes rating to Caa2 (LGD 5) from Caa1 (LGD 5).

Moody's also said it affirmed the company's SGL-3 speculative grade liquidity rating.

The outlook remains stable.

The downgrades reflect an expectation of negative free cash flow and high leverage for the next 12- to 18-months due to continuing operational challenges and execution risks around the company's value creation plan, the agency said.

The ratings are constrained by the company's continued operational underperformance and an expectation that leverage will be sustained at higher than 7.5x in the next 12- to 18-months, Moody's said.

The ratings also consider the company's exposure to raw material price increases and limited ability to pass through price increases to customers, along with its exposure to food safety recalls and liability claims, the agency said.

The company benefits from participation in the private label organic and non-genetically modified (non-GMO) food and beverage categories, which have attractive long-term growth prospects, Moody's said.

Moody's upgrades Ace Cash

Moody's Investors Service said it upgraded Ace Cash Express, Inc.'s corporate family rating and senior secured debt rating to B3 from Caa1.

The outlook is stable.

Moody's also said it withdrew the outlooks on Ace's senior secured debt rating and corporate family rating for its own business reasons.

The upgrades reflect a continued progress the company has made in transitioning its portfolio from payday loans toward longer-term installment loans while maintaining strong profitability, the agency said.

While Ace Cash still had higher reliance on payday loans compared to peers as of year-end 2018, Moody's said it expects the company to continue to transition to longer-term installment lending, without incurring higher-than-anticipated credit losses.

Moody's lifts Horizon Pharma USA

Moody's Investors Service said it upgraded the ratings of Horizon Pharma USA, Inc., a subsidiary of Horizon Pharma plc.

The upgrades conclude a review that began March 5, Moody's said.

The agency said it upgraded the company's corporate family rating to Ba3 from B2, probability of default rating to Ba3-PD from B2-PD, senior secured rating to Ba1 from Ba2 and senior unsecured rating to B1 from B3.

Moody's also said it assigned a Ba1 rating to the company's new $200 million revolving credit facility.

The agency also affirmed the SGL-1 speculative grade liquidity rating.

The upgrades reflect significant debt repayment with proceeds from the recent equity offering, Moody's said.

Horizon raised about $345 million of equity and, together with cash on hand, is repaying about $550 million of debt, the agency explained.

These transactions will reduce gross debt-to-EBITDA from 6 as of Dec. 31, 2018 to 4.4x, Moody's said.

The upgrades also consider the good growth outlook for Horizon's key drugs like Krystexxa, Ravicti and Procysbi, the agency added.

The ratings also consider Horizon's modest size compared to peers in the global pharmaceutical industry, Moody's said.

S&P upgrades Perstorp

S&P said it upgraded the long-term issuer credit rating on Perstorp to B from B- and assigned a B issue rating and 3 recovery rating to the proposed senior secured term loan.

The outlook is stable, since it expects Perstorp will significantly reduce adjusted debt-to-EBITDA ratio to about 5.8x in 2019 and 5.6x in 2020, the agency said.

S&P said the company will strengthen its EBITDA interest coverage ratio to higher than 3x.

At the end of February, Perstorp redeemed all of its senior and subordinated notes using the proceeds from its Capa disposal and new credit facilities, the agency said.

The company will put in place a new capital structure with a €850 million senior secured term loan B and a €100 million senior secured revolving credit facility.

S&P said it anticipates debt will decline by about 5 billion in Swedish krona, significantly reducing the group's leverage and interest burden.

Moody's rates Addison loan B2

Moody's Investors Service said it assigned first-time ratings to APFS Staffing Holdings, Inc. (Addison Group).

The corporate family rating was assigned at B2, probability of default rating at B2-PD and the proposed senior secured first-lien term loan due 2026 at B2.

The outlook is stable.

The proceeds of the term loan will be used to refinance existing indebtedness, pay related fees and expenses and add cash to the balance sheet, Moody's explained.

The existing debt was incurred in part to fund the purchases of Mondo International, LLC in December 2018 and DLC Holdings, LLC in January 2019, the agency said.

The ratings reflect the company's niche and regional focus on temporary and project staffing of professionals in information technology, finance and accounting, non-clinical healthcare, digital marketing and other white-collar functions, Moody's said.

Addison Group has modest profitability typical of temporary staffing companies, the agency said.

Moody's said it considers Addison Group's liquidity profile good.

S&P rates Addison Group loan B

S&P said it assigned a B issuer credit rating to SPFS Staffing Holdings Inc., which does business as Addison Group.

The agency also said it assigned a B rating and 3 recovery rating to the company's proposed first-lien term loan. The 3 recovery rating indicates 50% to 70% expected default recovery.

The stable outlook reflects an expectation that Addison will successfully integrate its recent acquisitions while continuing to grow organically by the mid-single digit percent area over the next 12 months.

S&P said it also expects the company's adjusted debt-to-EBITDA ratio will steadily decline to about 5.5x by year-end 2019.

The ratings reflect its small size and participation in the intensely competitive, highly fragmented and cyclical professional temporary staffing industry, the agency said.

The ratings also consider the company's acquisitive growth strategy, which is driven by its financial-sponsor ownership and entails execution and integration risks, S&P said.

These factors are partially offset by the company's good customer diversity and relationships through its focus on small- and medium-enterprises (SME) and its positive free cash flow generation, the agency said.

Moody's rates ADT notes B3

Moody's Investors Service said it assigned B3 (LGD 6) ratings to Prime Security Services Borrower, LLC's (ADT) new $1.25 billion senior unsecured notes due 2027.

The company will use the proceeds from the issuance to repay the $1.25 billion balance of its 9¼% second-lien senior notes.

Moody's said it plans to withdraw ratings on the second-lien senior notes following the close of the transaction.

ADT's B1 corporate family rating reflects the substantial, nearly $20 million in interest savings, the agency said, as well as debt-maturity extensions that the proposed exchange of second-lien debt for unsecured notes will represent for the company.

ADT's credit profile reflects its leading position in the North American residential alarm-monitoring and home automation services market, Moody's said, and continued improvements in performance metrics, including moderate anticipated revenue acceleration.

The stable outlook reflects its sponsor owner Apollo's continued high ownership interest in the company and the risks that its 85% ownership stake implies, the agency said.

S&P rates Churchill Downs notes B+

S&P said it assigned a B+ rating and 6 recovery rating to Churchill Downs Inc.'s proposed $400 million senior unsecured notes due 2027.

The 6 recovery rating indicates 0 to 10% expected default recovery.

The proceeds will be used to pay down a portion of the company's outstanding borrowings under its revolver, which it recently used to finance certain acquisitions, S&P said.

S&P also said it raised the rating on Churchill Downs' secured credit facility, consisting of a $700 million revolver and $400 million term loan B to BBB- from BB+.

The agency revised the recovery rating to 1 from 2. The 1 recovery rating indicates 90% to 100% expected default recovery.

S&P also said it affirmed the B+ rating on Churchill's existing $500 million senior unsecured notes due 2028. The 6 recovery rating is unchanged.

The agency said it expects improved recovery prospects for the secured lenders because of Churchill Downs' investments and property openings in the second half of 2018 and in 2019.

Moody's rates New Disney notes A2

Moody's Investors Service said it assigned an A2 senior unsecured rating to TWDC Holdco 613 Corp.'s (New Disney), newly issued notes which are being exchanged for notes of 21st Century Fox America, Inc.

New Disney is the new holding company of legacy the Walt Disney Co. and will complete its acquisition of 21st Century on March 20, Moody's said.

New Disney's new notes are being exchanged for most of 21st Century's outstanding bonds, which will come to consolidated New Disney as part of the acquisition, the agency said.

The new note issuance was initiated by a voluntary obligor exchange between New Disney and existing 21st Century bondholders, Moody's said.

The ratings reflect the company's position as the world's largest media conglomerate with a diverse portfolio of powerful brand names and iconic media assets with long operating histories, the agency said.

Disney's large scale and highly diversified revenue streams lead to sizable annual free cash flow generation and strong credit metrics, Moody's said.

The rating also captures the company's exposure to cyclical consumer spending pressures and volatility of its film businesses, the agency said.

These risks are somewhat tempered by Disney's vast geographic and product diversity that are supported by its track record of investing in strategic initiatives across multiple platforms, while profitably growing its established assets, Moody's said.

Moody's rates Sabre Industries loan B2

Moody's Investors Service said it assigned initial ratings to Sabre Industries, Inc., including a corporate family rating of B2 and probability of default rating of B2-PD.

Moody's also said it assigned a B2 (LGD 3) rating to the company's $65 million first-lien senior secured revolving credit facility and $425 million first-lien senior secured term loan.

The outlook is stable.

The proceeds from the proposed debt facilities, together with an equity contribution, will fund the proposed acquisition of Sabre by the private equity fund, the Jordan Co., Moody's said.

The ratings on the company's existing debt will be withdrawn once it is repaid.

The ratings reflect the company's position as one of the leaders in its niche markets within the utility and telecom industries with expanded service capabilities, the agency said.

The company possesses a healthy backlog that should further top line revenue growth and EBITDA generation, Moody's added.

Favorable industry dynamics, particularly in the utility business, should sustain this improvement, the agency said.

S&P rates Sabre loan B

S&P said it assigned a B rating and 3 recovery rating to Sabre Industries Inc.'s proposed $425 million first-lien term loan.

Sabre is being acquired by an affiliate of private equity firm the Jordan Co., S&P said, and the loan will be used to fund the acquisition.

The 3 recovery rating indicates 50% to 70% expected default recovery.

S&P also said it affirmed the B issuer credit rating on Sabre Industries, reflecting a highly leveraged, small, and narrowly focused manufacturing business that produces relatively steady and predictable revenue.

The stable outlook signals an expectation for adjusted debt-to-EBITDA to be in the 5x to 5.5x range over the next 12 months, the agency said.

That's elevated relative to higher rated industrial peers, but not when compared to many other private equity owned enterprises, S&P said.

The ratings also consider the company's small size with narrow scope and geographic concentration, the agency said.

The company's solid relationships and contractual agreements with large utility customers do provide a degree of stability and predictability to revenues, S&P added.

Moody's rates Syneos Health loans Ba3

Moody's Investors Service said it assigned Ba3 (LGD 3) ratings to the proposed senior secured credit facilities of Syneos Health, Inc. and downgraded the existing secured term loan ratings to Ba3 from Ba2.

Moody's also affirmed the Ba3 corporate family rating and probability of default rating at Ba3-PD.

The SGL-1 speculative grade liquidity rating also was affirmed.

The B2 rating on the unsecured notes of inVentiv Group Holdings, Inc. also was affirmed.

Moody's said it expects the notes will be repaid in full after the Oct. 1, 2019 call date later this year.

The outlook is stable.

The term loan A and revolver are being refinanced and the maturities are being extended to 2024 from 2022, the agency said, and the revolver upsized to $600 million from $500 million.

Moody's said it expects that Syneos will draw its delayed draw term loan later this year to fully repay the inVentiv unsecured notes.

The agency said it views the transaction as a credit positive as it will lengthen the company's debt maturity profile and lower cash interest costs.

The ratings reflect expectations that leverage will remain moderately high at more than 4x in the next 12- to 18-months, Moody's said.

Credit metrics are expected to improve in 2019 through earnings growth and debt repayment given an expectation for good cash generation through 2020, the agency said.

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