Moody’s downgrades McDonald’s to Baa1

Moody's Investors Service said it downgraded McDonald's Corp.’s senior unsecured ratings to Baa1 from A3 and affirmed its short-term commercial paper rating at Prime-2.

The outlook is stable.

The downgrade reflects the company's recent announcement that it intends to increase its returns to shareholders, the vast majority of which will be funded with additional debt.

Moody's views this increase as McDonald's maintaining an aggressive financial policy that will result in a material deterioration in credit metrics and limit its financial flexibility.

Fitch lowers McDonald’s view to negative

Fitch Ratings said it affirmed the issuer default ratings of McDonald's Corp. at BBB+ and F2.

The outlook also was revised to negative from stable.

The agency also affirmed the company’s bank credit facilities rating at BBB+, senior unsecured debt at BBB+ and commercial-paper rating at F2.

The negative outlook reflects McDonald's aggressive financial strategy during a period of challenged operating performance as the sustainability of recent same-store sales performance remains uncertain, Fitch said.

McDonald's cash-flow priorities have consistently been to invest in its business and return all remaining cash flow to shareholders, the agency said.

But management is demonstrating a growing willingness to utilize its balance sheet to increase shareholder returns, Fitch said.

The agency said it views this as a change in financial strategy and projects that total adjusted debt-to-EBITDAR will reach the mid-3x range in 2016, up from 3.1x as of Sept. 30, 2015.

S&P lowers Securitas view to stable

Standard & Poor’s said it revised the outlook on Securitas AB to stable from positive.

The agency also said it affirmed the BBB long-term and A-2 short-term corporate credit ratings and K-2 Nordic national scale short-term rating.

S&P also said it affirmed the BBB rating on the company’s €2 billion medium-term note program, €300 million notes due 2018, €350 million notes due 2017 and €350 million notes due 2021.

The outlook revision follows news that Securitas intends to acquire the commercial contracts and operational assets of Diebold Inc.’s electronics security business in North America, the agency said.

The acquisition price is about SEK 2.9 billion and the group will finance it using its existing revolving credit facility, S&P said.

The acquisition is expected to be completed in the first quarter of financial year 2016, subject to the receipt of appropriate regulatory approvals, the agency said.

The impact of this acquisition led to a downward revision of the group’s credit metrics for 2016 and 2017, S&P said.

Adding Diebold will allow Securitas to offer enhanced security services, but will only provide 3% to 4% of Securitas consolidated revenues and its contribution isn’t material enough to warrant any change in Securitas’ business risk profile, the agency said.

S&P downgrades Molson Coors

Standard & Poor’s said it lowered the ratings on Molson Coors Brewing Co., including the long-term corporate credit rating to BBB- from BBB+ and short-term ratings to A-3 from A-2.

All of the ratings on Molson Coors also remain on CreditWatch with negative implications.

The two-notch downgrade follows news that the company has entered into a definitive agreement with Anheuser-Busch InBev SA/NV to acquire the 58% stake in MillerCoors currently owned by SABMiller for about $12 billion.

The company said it intends to finance the acquisition with about 20%- to 25%-equity, S&P said, and the remainder with debt.

Based on this financing mix, the agency said it believes the debt-to-EBITDA ratio pro forma for the acquisition will be slightly more than 5x.

This is materially higher than expectations of leverage closer to 2x for the company to maintain the BBB+ rating, S&P said.

The acquisition will make Molson Coors the second-largest brewer in the United States with several leading brands, the agency said.

The ratings also consider that this transaction will lead to material synergies and is a strong strategic fit given that Molson Coors already owns 42% of MillerCoors and has close familiarity with MillerCoors management, S&P said.

Moody’s could drop Molson Coors

Moody's Investors Service said it placed the Baa2/ Prime-2 ratings of Molson Coors Brewing Co. and its rated subsidiaries on review for downgrade.

The action follows the announcement that Molson Coors has reached a definitive agreement to acquire from SABMiller the 58% of the MilllerCoors Joint Venture that it does not already own for about $12 billion.

The transaction is subject to a successful closing of a deal between Anheuser-Busch InBev and SABMiller.

Financial policy, including management's commitment to investment grade and plans to de-lever will be important factors in the rating outcome.

"Assuming that MolsonCoors will issue new equity of at least 20-25% of the transaction value as it anticipates, we would not expect more than a one notch downgrade to Baa3," Moody’s senior vice president Linda Montag said in a news release.

Under the agreement, Molson Coors will also acquire full ownership of the Miller brand portfolio outside of the U.S. and retain the rights to all of the brands currently in the MillerCoors portfolio for the U.S. market. These include Redd's and import brands such as Peroni and Pilsner Urquell.

The transaction is expected to close in the second half of 2016.

Fitch: Molson Coors on negative watch

Fitch Ratings said it placed Molson Coors Brewing Co.’s long-term issuer default rating and senior unsecured ratings at all of its entities on Rating Watch negative.

The negative watch follows news that Molson Coors has entered into a definitive agreement with Anheuser-Busch InBev SA/NV to purchase SABMiller plc’s 58% stake in MillerCoors for $12 billion.

The agreement also includes the ownership of the Miller Brand Family globally, an estimated $2.4 billion present value of cash tax benefits and perpetual, royalty-free U.S. rights to all imported and licensed brands including Peroni, Pilsner Urquell, Foster’s and Redd’s, Fitch said.

Molson Coors will finance the deal with a combination of existing cash, new debt and new equity, the agency said.

The transaction is conditioned upon the closing of AB InBev’s acquisition of SABMiller and necessary regulatory approvals, which is expected to occur in the second half of 2016, Fitch said.

Molson Coors currently has a long-term issuer default rating of BBB.

The negative watch reflects the projected significant increase in Molson Coors’ financial leverage, the agency said.

On a pro forma basis, Fitch said it expects the company’s total debt-to-EBITDA will be in the low- to mid-5x range when the transaction closes.

Moody’s ups Sweden banking system to stable

Moody's Investors Service said it changed the outlook on Sweden's banking system to stable from negative reflecting the positive impact of continued strong economic growth on asset quality and profitability.

"We expect the Swedish operating environment to remain supportive of bank performance, and forecast GDP growth to accelerate to 2.6% in 2015 and 2.7% in 2016, outpacing that of most other European nations," Moody’s vice president Giovanni Fontana said in a news release.

Sweden's GDP growth will continue to be driven by robust domestic demand fueled by the country's low interest-rate environment and rising household disposable incomes. The agency also expects unemployment to decline moderately to 7.6% through 2016 from 7.9% at end-2014.

Fitch rates Store Capital BBB-

Fitch Ratings said it assigned an issuer default rating of BBB- to Store Capital Corp.

The outlook is stable.

The ratings reflect the company’s strong management team, differentiated investment strategy, diversified portfolio and solid credit metrics, Fitch said.

These strengths are offset by the cross-collateralization features and reputational risk associated with the master funding conduit, which may restrict the company’s financial flexibility and provide material economic incentives for the issuer to prioritize the encumbered asset pool, the agency said.

While Store is a relatively new company, its senior management previously founded and ran two public companies – Franchise Finance Corp. of America and Spirit Finance, the agency said.

Fitch said it views management favorably, but noted that the track records of these companies are mixed from a credit perspective.

S&P rates Sunoco notes BBB

Standard & Poor’s said it assigned a BBB rating to the proposed notes issuance of Sunoco Logistics Partners Operations LP, a wholly owned subsidiary of Sunoco Logistics Partners LP.

The partnership intends to use the proceeds to repay outstanding borrowings under its revolving credit facility and for general partnership purposes, S&P said.

The corporate credit rating on Sunoco is BBB and the outlook is stable.

Fitch rates Sunoco notes BBB

Fitch Ratings said it assigned a senior unsecured notes rating of BBB to Sunoco Logistics Partners LP.

The notes are to be issued by Sunoco Logistics Partners Operations LP and guaranteed by Sunoco Logistics Partners, Fitch said.

The proceeds will be used to repay borrowings on the company’s revolving credit facility, the agency said.

Sunoco Logistics Partners has a long-term issuer default rating of BBB.

Sunoco Logistics Partners Operations has a long-term issuer default rating of BBB, senior unsecured debt rating of BBB, senior unsecured bank facilities rating of BBB, short-term issuer default rating of F2 and commercial-paper rating of F2.

The ratings are supported by the group’s large diversified asset base that serves high-demand markets, along with its stable, fee-based operations and growth projects, Fitch said.

The ratings also consider its supportive financial credit metrics, including strong distribution coverage ratio and less aggressive capital structure relative to its peers, the agency said.

The ratings also reflect expectations for a temporary increase in leverage in 2015 and 2016 as significant spending will pressure credit metrics, Fitch said.

Moody’s drops Amec Foster, notes

Moody's Investors Service said it downgraded Amec Foster Wheeler plc's rating to Ba1 from Baa3and converted the long-term issuer rating into a corporate family rating, in line with the agency's practice for corporates with non-investment-grade ratings.

Consequently, Amec’s senior unsecured medium-term note program was also downgraded to provisional Ba1 from provisional Baa3 and the Baa3 issuer rating was withdrawn.

Moody's assigned a corporate family rating of Ba1 and assigned a Ba1-PD probability of default rating Amec. The corporate family rating, which is typically assigned to speculative-grade corporates, reflects the agency’s opinion on Amec’s ability to honor its financial obligations as if it had a single class of debt and a single consolidated legal entity structure.

Fitch: Dominion Gas notes A-

Fitch Ratings said it assigned an A- rating to Dominion Gas Holdings, LLC’s new issue of 2015 series A senior notes due 2020.

The outlook is stable.

The proceeds will be used for general corporate purposes, repay short-term debt and repay intercompany indebtedness owed to its parent company, Dominion Resources, Inc.

The ratings reflect the company’s strong financial profile with conservative capitalization levels, Fitch said.

The ratings also consider its strong interest-coverage metrics as the company’s debt has been issued in the current low interest-rate environment, the agency said.

The company’s businesses are predominately regulated with only moderate commodity exposure, the agency said.

DBRS: Wells Fargo notes AA

DBRS said it assigned a rating of AA to three optionally exchangeable senior notes issued by Wells Fargo & Co.

These include $13.67 million 0.125% notes due March 13, 2019, $5 million 0.125% notes due Feb. 21, 2020 and $69 million of 0.25% notes due June 24, 2022.

The trend is stable.

The notes, at the option of the holder, are exchangeable into either a basket of equity securities or their cash value on the exchange notice date, DBRS said.

The offering documentation provides that the holders of the securities are contractually entitled to a 100% return of principal if held to maturity or redeemed by the issuer, the agency said.

Moody’s lowers Japan Petroleum to negative

Moody's Japan K.K. said it affirmed the A2 issuer rating of Japan Petroleum Exploration Co., Ltd. (Japex).

The outlook was changed to negative from stable.

Moody’s said the change in outlook to negative primarily reflects its expectation of weak profitability and increasing leverage in the next 12 to 18 months.

"We expect Japex's profitability to remain weak in the current low oil price environment, and its debt to increase as a result of its investments in large-scale projects over the next 12 to 18 months," Kailash Chhaya, Moody's vice president and lead analyst for Japan Petroleum, said in a news release.

S&P rates Equifax loan BBB+

Standard & Poor’s said it affirmed the BBB+ corporate credit rating on Equifax Inc.

The agency also said it assigned a BBB+ rating to the company’s recently announced $800 million three-year unsecured term loan.

The outlook is stable.

The ratings reflect the company’s leading market share in major markets internationally, consistent profitability and successful track record of growing revenues through expansion into markets adjacent to core consumer credit reporting, S&P said.

These factors underpin the company’s satisfactory business risk profile and modest financial risk profile assessments, the agency said.

Although the transaction will temporarily raise pro-forma leverage to more a stated trigger level of 2x, S&P said it believes that strong cash flow generation will enable Equifax to reduce leverage to a level consistent with the rating.

The stable outlook reflects the company’s strong market position, large recurring revenue base, conservative financial policies and a belief that the company will be able to reduce leverage to less than 2x in about 12 months, the agency said.

Moody’s rates Municipality Finance notes A3 (hyb)

Moody's Investors Service said it assigned an A3 (hyb) rating to the €350 million perpetual fixed-rate resettable additional Tier 1 (AT1) securities issued by Municipality Finance plc (Aaa, negative).

Moody’s said the A3 (hyb) rating is based on Municipality Finance’s standalone creditworthiness and is positioned two notches below the institution's implied a1 adjusted baseline credit assessment. Of these two notches, one notch reflects this security's high loss severity in default that Moody's assesses under its Advanced Loss Given Failure (LGF) analysis.

The additional notch reflects the higher default risk associated with the non-cumulative coupon skip mechanism.

Fitch rates Simon notes A

Fitch Ratings said it assigned an A rating to the €750 million 1.375% senior unsecured notes due 2022 issued by Simon International Finance SCA, a subsidiary of Simon Property Group, Inc.

The notes will be fully and unconditionally guaranteed by Simon Property Group, LP, the operating partnership of Simon Property Group, Inc.

The proceeds will be used to reduce the company’s existing euro-denominated borrowings and for general corporate purposes.

The company’s long-term issuer default rating of A reflects the strong quality of its retail real estate portfolio, significant scale and market-leading access to capital, Fitch said.

Other credit strengths include the company’s good liquidity and financial flexibility, the agency said.

S&P rates WindMW notes BBB-

Standard & Poor’s said it assigned a preliminary BBB- rating to WindMW GmbH’s about €420 million euro-denominated issuance due 2021 and $580 million dollar-denominated issuance due 2027.

The outlook is stable.

The preliminary project rating of BBB- reflects the operations phase of this recently built wind farm, S&P said.

The operations phase stand-alone credit profile is BBB-, the agency added.

The project’s ability to earn its contractual revenues hinges on maintaining consistently high availability, S&P said.

WindMW has established an operating plan with Siemens, which also provides the turbines and offers an availability guarantee, that entails certain operational redundancies to offset the risks associated with the plant’s remoteness and relative inaccessibility, the agency said.

While the higher operating costs and major maintenance needs weigh on debt service coverage ratios somewhat, they do support a base-case assumption of 95% availability and 84% efficiency, S&P said.

Moody’s assigns Baa3 to WindMW bonds

Moody's Investors Service said it assigned a senior secured provisional Baa3 rating to roughly €960 million of project bonds, maturing 2021 and 2027, to be issued by WindMW GmbH.

Proceeds will be used to refinance existing bank loans and pay associated swap breakage fees and other transaction commissions and expenses.

The outlook is stable.

"WindMW is Moody's first public rating of an offshore windfarm and sets an important precedent for this developing asset class," Moody's vice president and senior analyst Christopher Bredholt said in a news release.

"The Meerwind project benefits from long term support under the stable German regulatory regime and incorporates a number of features which, when combined with the project's strong debt service coverage ratios, mitigate the risks of the single asset's offshore environment."

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