S&P cuts Dealer Tire

S&P said it downgraded the ratings on Dealer Tire LLC and its first-lien term loan to B- from B after its acquisition of Dent Wizard.

The downgrade reflects Dealer Tire’s elevated leverage pro forma for the acquisition of Dent Wizard. With Dealer Tire’s incremental debt issuance, S&P said it expects debt to EBTIDA to remain well above 6x in the next couple of years and free operating cash flow to debt to remain below 3%.

The outlook is stable.

Moody’s ups Dealer Tire notes, view to negative

Moody’s Investors Service said it upgraded the senior secured rating to B1 from B2 of Dealer Tire LLC and changed the rating outlook to negative.

These actions anticipate the Dent Wizard acquisition will include an add-on of $415 million to the $975 million senior secured term loan and a meaningful amount of senior unsecured debt.

“Dent Wizard is a significant evolution in Dealer Tire’s strategy to diversify its service offering for automotive dealerships,” said Moody’s analyst, Mike Cavanagh in a press release. “In addition, leverage is likely to be elevated, at above 6x debt/EBITDA into 2021, leaving little flexibility to withstand operational missteps or market weakening.”

Moody’s lifts United Airlines view to positive

Moody’s Investors Service said it changed the outlook for United Airlines Holdings, Inc. to positive from stable. The agency also affirmed its ratings, including the Baa3 senior secured and Ba3 senior unsecured ratings.

“Operationally, 2020 is likely to be a replay of 2019 for United Airlines,” said Jonathan Root, a Moody’s senior vice president and lead analyst, in a press release.

“Ongoing network optimization focused on the mid-continent hubs, improving service delivery and ongoing cost management initiatives should hold margins steady in 2020 in light of cost growth pressures and as long as U.S. GDP growth is at least in line with Moody’s Macroeconomic Board’s expectation of 1.7% for 2019,” continued Root.

The positive outlook reflects expected benefits of United’s strong business profile and execution of its current network strategy which should sustain good operating cash flow in upcoming years.

Moody’s raises American Woodmark

Moody’s Investors Service said it upgraded American Woodmark Corp.’s corporate family rating to Ba1 from Ba2 and its probability of default rating to Ba1-PD from Ba2-PD. Moody’s also upgraded the rating on the company’s senior unsecured notes due 2026 to Ba2 from Ba3. The company’s SGL-1 speculative grade liquidity rating is maintained. The outlook is stable.

The upgrade of the corporate family rating to Ba1 reflects Moody’s expectations American Woodmark will benefit from sound fundamentals in key end markets, maintain its very good liquidity profile and follow conservative financial policies that will result in improved credit metrics.

“American Woodmark has done a terrific job in improving its balance sheet by paying down almost $250 million of its term loan over the last two years, resulting in credit metrics that warrant the higher rating,” said Peter Doyle, a Moody’s vice president and senior analyst, in a news release.

Moody’s raises BJS

Moody’s Investors Service said it upgraded the corporate family rating of BJS Wholesale Club, Inc. to Ba3 from B1, the probability of default rating to Ba3-PD from B1-PD and the senior secured bank credit facility to B1 from B2. The outlook is positive.

“Today’s upgrade recognizes the continued improvement in BJS quantitative credit profile, as well as the reduction in legacy sponsor ownership,” said Charlie O’Shea, a Moody’s vice president, in a press release.

“Margins continue to improve as the company rationalizes some of its products and expands its private label, which combined with debt reductions that have continued since the significant paydown from IPO proceeds, has resulted in metrics that are representative of a Ba company.”

“The positive outlook reflects Moody’s view that BJS operating performance and financial policy will result in continued deleveraging,” he said.

S&P lifts Forestar notes

S&P said it is raising its issue-level rating on Forestar Group Inc.’s 8% senior unsecured notes to B+ from B, one notch higher than the issuer credit rating. S&P also said it is revising the recovery rating to 2 from 3, indicating an expectation for substantial (70%-90%; rounded estimate: 85%) recovery in the event of a payment default.

The improved issue-level and recovery ratings are primarily because of the increased realizable value from the company’s inventory (land). Forestar’s land inventory increased to about $1 billion at the end of the fiscal year ended September from $498 million as of September 2018. The increase can be attributed to more orders for lots from D.R. Horton.

S&P upgrades PDC

S&P said it upgraded the ratings for PDC Energy Inc. and its unsecured notes to BB from BB- on the close of its acquisition of SRC Energy Inc.

The upgrade reflects S&P’s expectation PDC’s financial measures will improve following the close of the SRC transaction, combined with the company’s increased contiguous acreage position in the Denver-Julesburg Basin, which should provide some economies of scale and help support improved financial measures.

The outlook is stable.

S&P ups SRC, pulls ratings

S&P said it upgraded the ratings for SRC Energy Inc. and its senior unsecured notes to BB from B and B+, respectively, following the company’s acquisition by PDC Energy Inc.

S&P removed the ratings from CreditWatch with positive implications and withdrew the issuer rating. PDC assumed SRC’s debt. S&P revised the recovery rating to 3 from 2. The 3 recovery rating indicates an expectation of meaningful (50%-70%; rounded estimate: 65%) recovery of principal to creditors in the event of a payment default.

S&P revises L1R HB view to negative

S&P said it revised the outlook for L1R HB Finance Ltd., the parent of Holland & Barrett, to negative. L1R amended its credit pact so its owner LetterOne could buy H&B debt on a bilateral basis instead of a mandatory tender.

“The negative outlook reflects our view that, unless H&B’s performance markedly improves, its capital structure could become unsustainable or LetterOne may purchase H&B’s debt at significantly less than par value within the next 12 months,” said S&P in a press release.

S&P places XPO on watch

S&P said it placed the BB rating for XPO Logistics Inc. on CreditWatch with developing implications after the company announced it is pursuing strategic alternatives, including the possible sale or spinoff of one or more business units.

XPO said it is not pursuing any sale or spinoff for its North American less-than-truckload business.

Moody’s assigns B1 Iridium, view to positive

Moody’s Investors Service said it assigned a B1 corporate family rating to Iridium Satellite LLC as well as a B1-PD probability of default, and SGL-1 speculative grade liquidity in connection with the proposed term loan upsizing and expected repayment of unsecured notes. Moody’s affirmed the B1 rating on the upsized $1.75 billion senior secured first-lien credit facilities. The ratings on the senior unsecured notes will be withdrawn upon the repayment of the notes. The outlook is positive.

Iridium’s credit facility consists of a seven-year, $1.65 billion term loan B due 2026 following the proposed $200 million upsize and a five-year, $100 million revolver due 2024.

Iridium is raising $200 million in proceeds, which together with the release of cash, will be used to fully repay outstanding unsecured notes plus transaction fees and expenses at Iridium Communications Inc. The $100 million revolver will be undrawn at close. The repayment of the notes collapses the capital structure, leaving a single class of senior secured debt.

S&P shifts PAE view to positive

S&P said it revised the outlook for PAE Holding Corp. to positive from stable. The company is being acquired by Gores Holdings III Inc.

“The positive outlook reflects our expectation that PAE’s debt to EBITDA will improve to below 5x in 2020 as it uses cash from the acquisition to repay debt. Gores is acquiring PAE for a cash purchase price of $620 million from its private-equity sponsor, Platinum Equity, and plans to use $160 million of the proceeds to pay down its second-lien term loan,” said S&P in a press release.

PAE will become a publicly traded company and Platinum Equity, with a less than 30% stake, will no longer control the company. S&P expects debt to EBITDA to be 4.5x-5x in 2020, down from its previous expectations of 6x-6.5x.

S&P also affirmed its B+ and CCC+ issue ratings on the company’s first-lien and second-lien debt, respectively. The recovery ratings remain 2 and 6, respectively.

S&P rates ADT notes B-

S&P said it assigned its B- issue-level rating and 6 recovery rating to ADT Inc.’s proposed $1.3 billion second-lien notes. The 6 recovery rating indicates an expectation for negligible recovery (0%-10%; rounded estimate: 0%) in the event of a payment default.

The company intends to use the proceeds and $17 million of borrowings under its revolving credit facility to redeem in full $1.246 billion outstanding under its 9¼% second-lien notes maturing in 2023 and pay transaction expenses.

The transaction is generally leverage neutral but extends its weighted average debt maturity to 5.4 from 5.3. Prime Security Services Borrower LLC is the issuer of the new second-lien notes. The notes rank junior to existing first-lien debt up to the value of the first-lien collateral.

Moody’s assigns B3 to MEG notes

Moody’s Investors Service said it assigned a B3 rating to MEG Energy Corp.’s proposed $800 million senior unsecured notes offering due 2027.

The proceeds will be used to refinance all of the existing $800 million notes due 2023. Concurrently, MEG is repaying $100 million of the $597 million second-lien 2025 notes.

“MEG’s debt reduction and refinancing are credit positive because the company will improve its credit metrics and maturity profile by pushing out the nearest bond maturity to 2024,” said Paresh Chari, a Moody’s analyst,” in a press release.

Moody's rates BlackRock notes Aa3

Moody's Investors Service said it assigned an Aa3 rating to BlackRock, Inc.'s new senior unsecured notes due April 2030. The offering is a takedown from a multiple seniority shelf registration statement of BlackRock. All existing ratings will remain unchanged.

BlackRock expects to use the proceeds for general corporate purposes. Its next term maturity is the $750 million of 4.25% Notes due May 2021. At Sept. 30, BlackRock had no amounts outstanding under its credit facility and had no unsecured commercial paper notes outstanding.

BlackRock's outlook is stable.

Fitch rates Cable & Wireless loan BB-

Fitch Ratings said it assigned BB-/RR4 ratings to Cable & Wireless Communications Ltd.’s new $1.3 billion term loan. The borrower of the term loan will be Sable International Finance Ltd. and Coral-US Co-Borrower LLC.

The proceeds will be used to partially refinance a $1.6 billion term loan due 2026.

The company’s other ratings are unchanged. The outlook is stable.

S&P rates Cable & Wireless loan BB-

S&P said it assigned its BB- issue-level rating on Coral-US Co-Borrower LLC’s new $1.3 billion senior secured term loan B-5 due 2028. Coral-US Co-Borrower is a subsidiary of Cable & Wireless Communications Ltd.

“We view the transaction to be debt neutral because CWC will use proceeds to repay part of the existing $1.64 billion secured term loan and pay any fees in connection with the new loan. The new loan will have several incurrence covenants calculated under a proportionate basis: net leverage ratio of maximum of 5x and senior secured net leverage ratio maximum of 4x,” said S&P in a press release.

S&P said this transaction is consistent with company’s debt refinancing strategy and will somewhat improve CWC’s debt maturity profile to 7.5 years from 6.7 years, with a weighted average cost of debt at 6.1%.

Fitch rates CenturyLink notes BB+

Fitch Ratings said it assigned a BB+/RR1 rating to CenturyLink, Inc.’s offering of $750 million of senior secured notes. Proceeds will be used to repay a portion of its senior secured credit facilities.

As of Sept. 30, and pro forma for subsequent refinancing transactions, including the current offering, CenturyLink had $550 million outstanding on its senior secured revolver and $7.041 billion outstanding on its senior secured term loans.

CenturyLink’s long-term issuer default rating is BB. The outlook is stable.

Moody’s assigns CenturyLink notes Ba3

Moody’s Investors Service said it assigned a Ba3 to CenturyLink, Inc.’s proposed $750 million senior secured notes due 2027, in line with existing secured debt at this ultimate holding company entity.

The proceeds, together with cash on hand, will be used to pay down a portion of CenturyLink’s senior secured term loan facilities.

All other ratings including the company’s Ba3 corporate family rating and stable outlook are unchanged.

S&P assigns Ineos notes BB

S&P said it assigned a BB rating to Ineos Styrolution Group GmbH’s proposed offering of €500 million of senior secured notes.

The rating on the notes is aligned with term loans in the capital structure, and in line with S&P’s issuer credit rating on Ineos Styrolution Holding Ltd.

Proceeds will be used to fund expansion and pay a dividend to its ultimate parent Ineos Ltd.

S&P rates Innophos loan B+, notes B-

S&P said it assigned a B+ with a 2 recovery rating (rounded estimate: 75%) to a planned $415 million term loan B to be issued to Innophos Holdings Inc. S&P also assigned a B- issue-level rating and 5 recovery rating (rounded estimate: 25%) to the company's proposed $300 million of senior unsecured notes. The company will also issue a $125 million asset-based loan facility

One Rock Capital Partners LLC will use the proceeds along with common equity to acquire Innophos.

The agency lowered the issuer credit rating on Innophos Inc. to B from BB, revising the outlook to stable, and is withdrawing the rating on this entity. The company will continue to file financials at Innophos Holdings Inc.

S&P assigned a B rating to Innophos Holdings. “The rating reflects our expectation that the capital structure closes as proposed and the debt consists entirely of long-duration debt with a maturity of at least five years,” said S&P in a press release.

The outlook is stable.

S&P rates MEG notes BB-

S&P said it assigned its BB- issue-level rating and 2 recovery rating to MEG Energy Corp.’s proposed $800 million issuance of senior unsecured notes due 2027. The 2 recovery rating indicates an expectation of substantial (capped at 70%-90%; estimated recovery of 85%) recovery in a simulated default scenario.

MEG intends to use the proceeds to fully repay its 6 3/8% $800 million unsecured notes due 2023. The new notes will rank pari passu with the 2024 unsecured notes. Concurrent with the refinancing transaction, the company plans to repay $100 million of its original $750 million secured notes due 2025 from cash on hand.

All other ratings on MEG are unchanged. Tuesday, S&P revised its outlook on MEG to stable from negative, based primarily on an expectation of improving credit metrics, with estimated funds from operations-to-debt of 15%-18% for 2020-2021.

Moody’s rates Neuraxpharm, loan B3

Moody’s Investors Service said it assigned a B3 corporate family rating and B3-PD probability of default rating to Neuraxpharm Debtco Sarl. Concurrently, Moody’s assigned B3 instrument ratings to the €551 million senior secured term loan B, the €85 million senior secured revolving credit facility and the €15 million senior secured acquisition and capex facility made available to Neuraxpharm Holdco Sarl. The outlook is stable.

“The B3 CFR reflects the high leverage in Neuraxpharm’s capital structure following its announcement to increase debt and pay around €90 million to its shareholders. Moody’s expects Neuraxpharm’s pro forma leverage – defined as Moody’s adjusted gross debt/EBITDA – to be somewhat above 7x with deleveraging towards 5.5x unlikely to occur until 2022 at the earliest,” said Knut Slatten, a Moody’s vice president, senior credit officer and lead analyst for Neuraxpharm, in a press release.

The stable outlook reflects the agency’s expectation that Moody’s adjusted gross leverage will remain above 6x at least until 2021.

S&P assigns Rockies Express notes BBB-

S&P said it assigned its BBB- issue-level rating to Rockies Express Pipeline LLC’s announced $750 million in senior unsecured notes.

Rockies is expected to use the proceeds to repay its $750 million April 2020 notes. “As a result, we don’t expect the issuance to increase leverage or have a material effect on credit metrics. Our BBB- issuer credit rating is unchanged,” S&P said in a press release.

S&P said it expects Rockies’ leverage to remain in the 3.5x area over the next two years as the company endeavors to sign contracts on the west end of the pipe near the Denver-Julesburg Basin.

Moody’s rates Rockies Express notes Ba1

Moody’s Investors Service said it assigned a Ba1 rating to Rockies Express Pipeline LLC’s proposed senior unsecured notes. Rockies’ other ratings, including its Ba1 corporate family rating and stable outlook are unchanged. The Ba1 rating on the existing $2 billion senior unsecured notes is also unchanged.

The notes are being offered to refinance $750 million senior unsecured notes due in April 2020.

The proposed unsecured notes, along with Rockies’ existing unsecured notes, are rated Ba1, the same as the company’s CFR. The senior unsecured notes are rated at the same level as the CFR because the company’s long-term debt, which includes a $150 million revolver, is all unsecured.

Fitch gives MEG notes B+

Fitch Ratings said it assigned a B+/RR3 rating to MEG Energy Corp.’s proposed senior unsecured note issuance. MEG Energy’s long-term issuer default rating is B.

The company plans to offer $800 million of senior unsecured notes due 2027 and use the proceeds, including cash on hand, to refinance the 2023 senior unsecured notes and a portion of the senior secured second-lien notes due 2025.

MEG’s ratings reflects improving credit metrics, below average refinancing risk (no major bond maturities until 2024 following the proposed refinancing and revolver extended to 2024), good liquidity, the expectation that the company will generate positive free cash flow over the forecasted period, higher production capacity, improved transportation logistics that should lead to higher realized prices and low-cost structure.

The outlook is positive.

S&P: Ortho-Clinical Diagnostics units debt CCC

S&P said it assigned its CCC issue-level rating and 6 recovery rating to the proposed senior unsecured notes that will be co-issued by Ortho-Clinical Diagnostics Bermuda Co. Ltd.’s (Ortho-Clinical) subsidiaries Ortho-Clinical Diagnostics SA and Ortho-Clinical Diagnostics Inc. The 6 recovery rating indicates an expectation for negligible (0%-10%; rounded estimate: 5%) recovery in the event of a payment default.

Ortho-Clinical will use the proceeds to partially refinance its senior unsecured notes due 2022. S&P’s ratings on the company’s debt remain unchanged.

“Our B- issuer credit rating on parent Ortho-Clinical continues to reflect our expectation that the company’s leverage will remain high at more than 7.5x while its discretionary cash flow generation stays minimal at between $30 to $40 million in 2019 and 2020,” said S&P in a press release.

Moody’s gives Ortho-Clinical notes Caa2

Moody’s Investors Service said it assigned a Caa2 rating to Ortho-Clinical Diagnostics SA’s new senior unsecured notes. The unsecured notes are rated Caa2 as they are effectively subordinated to the secured credit facility and structurally subordinated to the liabilities of non-guarantor foreign subsidiaries. Ortho’s ratings, including its B3 corporate family rating, B3-PD probability of default rating and B2 senior secured bank credit facilities ratings remain unchanged.

Proceeds will be used to refinance a portion of the existing 6 5/8% unsecured notes that mature in 2022. Moody’s said it views the notes refinancing as a credit positive. The transaction will be leverage neutral and will extend the company’s debt maturity profile.

The outlook is stable.

Moody’s assigns Growthpoint loan Baa2

Moody’s Investors Service said it assigned a Baa2 rating to Growthpoint Finance Pty Ltd.’s domestic backed senior secured bank credit facility. The outlook is stable.

Growthpoint Finance is a 100% wholly owned subsidiary of Growthpoint Properties Australia Ltd. This facility was previously rated under Growthpoint Australia, however, the new assignment reflects a change in the borrowing entity and novation of the facility to Growthpoint Finance from Growthpoint Australia. The rating on the facility continues to reflect the credit quality of Growthpoint Australia.

Fitch rates Rockies Express notes BBB-

Fitch Ratings said it assigned a BBB- rating to Rockies Express Pipeline, LLC’s proposed offering of $750 million of senior unsecured notes.

Rockies Express has $750 million of 5.625% senior notes due April 15, 2020, proceeds from the note offering are expected to be used to refinance this maturity.

Fitch also affirmed the company’s long-term issuer default rating. The outlook is stable.

S&P rates Triton preferreds B+

S&P said it assigned its B+ issue-level rating to Triton International Ltd.’s proposed series D cumulative redeemable perpetual preference shares (final amount to be determined upon close).

The preferred stock, which S&P will treat as 50% equity and 50% debt when calculating its financial ratios, will rank senior to the company’s common stock. The issue-level rating reflects the preferred shares’ subordination to the company’s other debt instruments (issued at its subsidiaries) and the deferability of their dividend payments.

Triton will use the proceeds for general corporate purposes, including for capital spending, common share repurchases, dividend payments and debt repayment.

S&P gives BlackRock notes AA-

S&P said it assigned its AA- senior unsecured debt rating to BlackRock Inc.’s proposed offering of $1 billion of 10-year senior unsecured notes. S&P expects the company to use the proceeds for general corporate purposes.

“We continue to estimate that BlackRock’s net debt leverage will remain within our previous expectations of 0.5x-0.8x, and stay well below 1.5x (our minimal financial risk assessment). Our leverage projections consider events of the past 12 months, including the company’s acquisition of eFront ($1.3 billion) and BlackRock’s agreement to repurchase shares in a private transaction ($1.27 billion), in addition to the repayment in full of its $1 billion 5% senior unsecured notes due December 10, 2019, as well as this proposed debt issuance,” said S&P in a press release.

S&P’s long-term issuer credit rating on BlackRock remains AA-, and the outlook is stable.

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