Moody’s downgrades Owens-Illinois

Moody’s Investors Service said it downgraded the corporate family rating of Owens-Illinois Group, Inc. to B1 from Ba3 and the probability of default rating to B1-PD from Ba3-PD.

Moody’s also downgraded the rating on the company’s senior unsecured notes at subsidiary OI European Group BV to B1 from Ba3 and the senior unsecured notes at subsidiary Owens-Brockway Glass Container, Inc. to B3 from B1. The speculative grade liquidity rating is SGL-2. Moody’s revised the outlook to stable from negative.

“The downgrade of the CFR to B1 reflects Moody’s expectation that credit metrics will improve, but remain weak over the next 12 months as the company continues to struggle with sluggish end markets and the consequent low fixed cost absorption,” the agency said in a press release.

However, Moody’s said it forecasts debt to LTM EBITDA to improve to 5.2x and free cash flow to debt to be over 3.5% by the end of 2021.

The downgrade of the notes at Owens-Brockway to B3 from B1 reflects the increased incremental usage of the revolver in the loss given default methodology at the B1 CFR and the decline in the asbestos-related liability, Moody’s said.

The stable outlook reflects an expectation the company will dedicate free cash flow to debt reduction, realize the improvements in sales and margins, and achieve the projected progress in credit metrics, Moody’s said.

S&P ups Catalent

S&P said it upgraded Catalent Inc.’s issuer rating to BB from BB-.

“Our upgrade of Catalent reflects strengthening credit metrics as a result of strong business performance following several acquisitions and favorable industry trends during the Covid-19 pandemic. We now expect adjusted debt to EBITDA of 3.5x-4x, a full turn lower than our previous expectations of the higher end of 4.5x-5x,” the agency said in a press release.

The outlook is stable.

Moody’s upgrades Selecta

Moody’s Investors Service said it upgraded to Caa1 from Caa3 the corporate family rating of Selecta Group BV and the company’s probability of default rating to Caa1-PD/LD from Ca-PD. At the same time, Moody’s assigned a Caa1 rating to the first lien senior secured notes due 2026, a Caa3 rating to the second lien senior secured notes due 2026, and a B1 rating to the €150 million super senior secured revolving credit facility due 2026. The outlook remains negative.

The rating action follows Selecta completing its financial restructuring plan, including a debt-to-equity swap. The upgrade considers the lower debt burden, improved liquidity and that EBITDA will recover over the next 12-18 months, Moody’s said.

Moody’s appended Selecta’s Caa1-PD PDR with the LD (limited default) designation as the company’s debt-to-equity swap. The agency said it views the exchange as a distressed exchange, which is an event of default under Moody’s definition of default. Moody’s will remove the /LD designation from the company’s PDR after three business days.

S&P puts Leslie’s Poolmart on positive watch

S&P said it placed its ratings on Leslie’s Poolmart Inc., including the B issuer credit rating, on CreditWatch with positive implications, reflecting the start of its initial public offering.

Leslie’s plans to use the proceeds to repay its senior unsecured notes. It will use the remaining proceeds for working capital and general corporate purposes, potentially including partial repayment of the $815 million outstanding (as of June 2020) term loan due 2023. The company’s leverage could fall below 5x, S&P said.

“We expect to resolve the CreditWatch placement following completion of the IPO and corresponding debt repayment. We will also review our expectations for business performance and assess the company’s financial policy,” the agency said in a press release.

Fitch puts Nexi on positive watch

Fitch Ratings said it placed Nexi SpA’s long-term issuer default and senior unsecured debt ratings of BB- on rating watch positive.

“The RWP on Nexi reflects its announced merger with SIA SpA (SIA), its main competitor in Italy. The acquisition will be entirely funded through a share exchange that will see SIA’s shareholders receiving a 30% stake in Nexi’s enlarged share capital, with existing shareholders retaining the other 70%. The leading shareholder of the new group will be entities related to Cassa Depositi e Prestiti SpA (CDP),” Fitch said in a press release.

Fitch said it will resolve the RWP after the transaction closes. “Under the presented terms, this transaction could result in an upgrade of Nexi’s ratings by one notch to BB, if funds from operations (FFO) gross leverage is equal to or lower than 5.5x by end-2022, pro forma for the SIA acquisition,” the agency said.

S&P revises Carriage Services view to stable

S&P said it affirmed its B issuer credit rating for Carriage Services Inc. and revised the outlook to stable from negative.

Carriage Services’ operations have markedly improved. The company is on track to successfully integrate the four acquisitions it made roughly one year ago, controlled costs and gained market share. “Meanwhile, the company is proactively addressing its capital structure through debt paydowns,” S&P said in a press release.

The outlook reflects S&P’s forecast that discretionary cash flow as a percentage of debt will stay above 3%. However, the agency said it also projects S&P Global Ratings-adjusted leverage to remain above 5x over the intermediate period.

S&P changes FinecoBank view to stable

S&P said it revised the outlook on FinecoBank to stable from negative and affirmed the BBB long-term issuer credit ratings on Fineco.

The change in outlook mirrors Italy’s change in outlook to stable on Oct. 23, the agency said.

S&P revises Jefferies view to stable

S&P said it revised the outlook for Jefferies Financial Group Inc. to stable from negative and affirmed the BBB issuer credit ratings on JFG and Jefferies Group LLC and the BBB+ issuer credit ratings on Jefferies International Ltd. and Jefferies LLC.

“The outlook revision to stable from negative reflects our view that JFG will be less affected by the deterioration of economic conditions than we had anticipated in April, at the onset of the Covid-19 pandemic. Capital market volume has been one of the key strengths for financial institutions amid the pandemic,” S&P said in a press release.

S&P shifts UniCredit bond view to stable

S&P said it revised the outlook for UniCredit SpA’s mortgage covered bonds to stable from negative and affirmed the bonds’ AA- rating.

The rating action follows the change in outlook and rating affirmation for Italy on Oct. 23, S&P said.

Moody’s assigns Aston Martin notes Caa1

Moody’s Investors Service said it assigned a Caa1 rating to the new senior secured first-lien notes due 2025 issued by Aston Martin Capital Holdings Ltd. Concurrently, Moody’s affirmed the Caa1 corporate family rating and Caa1-PD probability of default rating of Aston Martin Lagonda Global Holdings plc.

`“The Caa1 rating on the new notes reflects the changes to the capital structure, in particular the introduction of a sizeable second lien as well as the reduction in overall first-lien debt. The guarantees for the new notes cover 79% of AML’s revenue and 113% of AML’s assets and the security package includes the main factory in Gaydon, U.K. and material intellectual property similar to the legacy notes,” Moody’s said in a press release.

Proceeds from the notes, the new second-lien notes due 2026, equity issuance and new revolving credit facility will be used to refinance the company’s capital structure and support liquidity. Upon completion of the transaction and repayment of the rated 2022 notes, Moody’s expects to withdraw the rating on the rated 2022 notes.

The agency changed the outlook to stable from negative. The outlook reflects the expectation performance should start to improve, although significant risks remain, Moody’s said.

Moody’s assigns Hema Caa2

Moody’s Investors Service said it assigned a Caa2 corporate family rating to Helix Holdco SA (Hema) and a Caa2-PD probability of default rating.

Concurrently, Moody’s affirmed the B2 rating to the €42 million guaranteed new money private placement notes issued by Hema BV, the Caa2 rating to the €305 million guaranteed senior secured notes issued by Hema Bondco I BV and the Ca rating to the €120 million pay-in-kind notes issued by Helix Holdco. The outlook has been changed to stable from negative for Hema BV and HEMA Bondco I BV.

Moody’s also assigned a stable outlook to Helix Holdco.

Moody’s withdrew Hema BV’s ratings pre-restructuring, including Hema BVs Ca CFR and C-PD/LD PDR, the Caa3 rating to the previous €600 million guaranteed senior secured notes issued by Hema Bondco I and the C rating to the €150 million guaranteed senior unsecured notes issued by Hema Bondco II BV.

The Caa2 rating reflects Hema completing its debt restructuring on Oct. 19. The restructuring resulted in a reduction in the senior secured notes to €305 million from €600 million and a complete write-off of the €150 million of senior notes, Fitch said.

The transaction also changed the shareholder holding structure with the outstanding senior secured notes owners becoming Hema’s new shareholders. The noteholders also obtained the PIK notes of €120 million, Moody’s said.

Fitch rates SLM notes BB+

Fitch Ratings said it assigned SLM Corp.’s $500 million of 4.2% senior unsecured notes maturing in October 2025 a BB+ rating.

The unsecured debt rating is equalized with the ratings assigned to SLM’s senior unsecured debt, as the new notes will rank equally in the capital structure. Fitch said the alignment of the unsecured debt rating with that of the long-term BB+ issuer rating reflects solid unencumbered collateral coverage.

Proceeds are expected to be used to fund a tender for up to 2 million shares (50% of outstanding shares) of its series B non-cumulative preferred stock, and for general corporate purposes, which may include the repayment of debt and future share repurchase programs.

Fitch rates Veolia notes BB+

Fitch Ratings said it assigned Veolia Environnement SA’s €850 million undated non-call 5.5 year and €1.15 billion undated non-call 8.5 year deeply subordinated fixed-rate resettable notes a rating of BB+.

“The hybrid notes are deeply subordinated and rank senior only to Veolia’s share capital, while coupon payments can be deferred at the option of the issuer. These features are reflected in the BB+ rating, which is two notches lower than Veolia’s senior unsecured rating,” Fitch said in a press release.

The proceeds will be used to refinance the acquisition of 29.9% of Suez SA shares from Engie SA and pre-funded from the group’s own resources.

S&P gives Avantor notes BB-

S&P said it gave its BB- issue-level rating and 3 recovery rating to Avantor Inc.’s €550 million of proposed senior secured notes. The 3 recovery rating indicates an expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in the event of a payment default.

Subsidiary Avantor Funding Inc. will issue the notes.

Proceeds along with the new senior secured term loan are expected to be used to repay its $1.5 billion of 6% secured notes and €500 million of 4¾% secured notes as well as related fees and expenses.

Fitch acts on Hawaiian Airlines certificates

Fitch said it downgraded multiple tranches of Hawaiian Airlines’ enhanced equipment trust certificates.

The agency downgraded Hawaiian Airlines’ pass-through certificates series 2020-1 class B certificates to BB- from BB+. The Hawaiian Airlines 2013-1 class A certificates have been downgraded to BB from BBB- and the class B certificates have been downgraded to BB- from BB+.

“The rating actions are being driven by the combined effects of Fitch’s recent downgrade of Hawaiian’s issuer default rating to B- from B+, increased value stress assumptions utilized in Fitch’s models, which reflect the ongoing pressure on the airline industry, and updated appraisal values that show declining levels of overcollateralization for certain transactions.

Fitch affirmed the Hawaiian Airlines 2020-1 class A certificates at A-. The affirmation reflects strong levels of overcollateralization and attractive underlying collateral that continue to support the rating, the agency said.

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