Moody’s downgrades New Look

Moody’s Investors Service said it downgraded the corporate family rating New Look Retail Holdings Ltd. to C from Caa3. Concurrently, the agency downgraded to C from Ca the rating of the £440 million equivalent of senior secured notes maturing in 2024 issued by New Look Financing plc, a subsidiary of the company. Moody’s also downgraded New Look Retail’s probability of default rating to Ca-PD from Caa3-PD.

“Today’s rating action follows the announcement earlier this month that the company has reached an agreement with its financial creditors to a proposed restructuring of its balance sheet. Moody’s considers the need for this latest restructuring, and its severity, is directly linked to the coronavirus crisis which has adversely affected both the company’s current year financial performance and its prospects for future trading,” the agency said in a press release.

The restructuring depends on a successful company voluntary arrangement, Moody’s said.

The outlook remains unchanged at negative.

S&P switches Gogo watch to positive

S&P said it revised the CreditWatch implications for Gogo Inc. to positive from negative. S&P put the company’s ratings on CreditWatch on March 13.

Gogo entered into an agreement to sell its commercial aviation business to Intelsat for $400 million in cash.

“We believe Gogo will utilize the proceeds primarily to reduce leverage, likely to exit 2021 with leverage of less than 7.5x and an ability to continue deleveraging through positive cash flow generation and continued EBITDA growth as it right sizes its corporate cost structure and private air travel recovers from the Covid-19 pandemic,” S&P said in a press release.

S&P shifts International Seaways view to stable

S&P said it revised the outlook for International Seaways Inc. to stable from negative and affirmed the B- ratings on the company and its 8½% due in 2023.

“International Seaways’ revenue strongly increased in the first half of 2020, benefiting from a favorable international tanker market. The combined effects of declining oil demand, overproduction, and storage shortage temporarily elevated demand for floating storage and pushed average rates high for the international tanker market. This led to strong earnings growth throughout the first and second quarters,” S&P said in a press release.

S&P said it now forecasts the company’s fiscal year 2020 revenue to be 20% higher than FY2019.

The stable outlook reflects the expectation that despite negative pressure on freight rates, funds from operations to debt will remain above 25% for the next 12 months following the company’s repayment of its $40 million term loan in August, the agency said.

Fitch rates Encore BB+

Fitch Ratings said it assigned Encore Capital Group, Inc. a long-term issuer default rating of BB+ with a stable outlook. Fitch also assigned the senior secured notes issued by subsidiaries Cabot Financial (Luxembourg) SA and Cabot Financial (Luxembourg) II SA an expected rating of BB+.

“The change to the senior secured notes’ terms forms part of Encore’s implementation of a new global funding structure, under which the presently legally separate funding structures of Encore’s two primary operating subsidiaries, Midland Credit Management, Inc. in the U.S. and Cabot in the U.K., will be combined.

“Their guarantors will subsequently comprise substantially all material Encore subsidiaries. Cabot financing group covenants will on completion of the planned changes, apply to the new financing group. Certain other debt, principally a revolving credit facility and a $300 million committed bank stretch facility will rank super-senior to the senior secured notes. The change of terms is subject to receipt of majority consent from the senior secured noteholders,” Fitch said in a press release.

Moody’s assigns Encore Ba2

Moody’s Investors Service said it assigned a corporate family rating of Ba2 to Encore Capital Group, Inc. Also, Moody’s placed the B1 ratings assigned to the senior secured notes issued by the funding entities of Encore’s operating subsidiaries Cabot Financial (Luxembourg) SA and Cabot Financial (Luxembourg) II SA on review for upgrade.

“This follows Encore’s group reorganization announcement aiming to combine the currently legally separate funding structures of its U.S. and EMEA operating subsidiaries under a new global funding structure [1]. Upon consummation of the transaction, Moody’s expects to upgrade the Cabot senior secured notes by one notch and to withdraw the CFR of B1 currently assigned to Cabot Financial Ltd.,” the agency said in a press release.

The outlook is stable, which reflects Moody’s forecast Encore’s financial performance in the next 12-18 months will remain consistent with its historical performance, the agency said.

Fitch gives Tenet notes B

Fitch Ratings said it assigned a B/RR4 rating to Tenet Healthcare Corp.’s senior unsecured notes, the same ratings as Tenet’s outstanding senior unsecured notes.

The company plans to use the proceeds to redeem its 8 1/8% senior unsecured notes due 2022.

The outlook is stable.

S&P gives Tenet notes CCC+

S&P said it assigned its CCC+ rating to Tenet Healthcare Corp.’s proposed unsecured notes due in 2028. The recovery rating is 6, the same as for the existing unsecured debt, indicating S&P’s expectation for negligible (0%-10%; rounded estimate: 0%) recovery in the event of a payment default.

The company intends to use the proceeds to repay its 8 1/8% unsecured notes due 2022. “While the transaction will increase leverage by a very small, insignificant amount, we view this increase as offset by the likely benefit from lower interest expense,” S&P said in a press release.

Tenet’s B long-term issuer credit rating and all issue-level ratings on Tenet are unchanged, the agency said.

The outlook is stable.

Fitch assigns Royal FrieslandCampina hybrid BBB-

Fitch Ratings said it assigned Royal FrieslandCampina NV’s planned debut €300 million of perpetual subordinated hybrid securities an expected BBB- rating. The proposed securities qualify for 50% equity credit. Fitch also affirmed the company’s long-term issuer default rating at BBB+.

“The notes are rated two notches below RFC’s IDR, given their deep subordination and consequently, lower recovery prospects in a liquidation or bankruptcy scenario relative to the senior obligations. In the capital structure, the notes only rank senior to the claims of equity shareholders and rank pari passu with RFC’s member bonds and cooperative loan,” Fitch said in a press release.

The outlook remains negative.

Moody’s assigns Spirit Airlines B1, notes Ba3

Moody’s Investors Service said it assigned first-time ratings to Spirit Airlines, Inc., including a B1 corporate family rating, a B1-PD probability of default rating and an SGL-2 speculative grade liquidity rating.

At the same time, Moody’s assigned a Ba3 rating to the senior secured notes due 2025 that Spirit announced on Monday. The issuer of the notes, Spirit IP Cayman Ltd. and co-issuer Spirit Loyalty Cayman Ltd. are new, wholly-owned, indirect, bankruptcy-remote, special-purpose entity subsidiaries of Spirit. Spirit and the respective, newly created intermediate holding companies will own the co-issuers and will guarantee the note obligations.

The B1 rating reflects Spirit’s solid market position as a leading low-cost provider of passenger air transportation in the U.S.’ domestic market offset by the uncertainty of the timing of a recovery from the pandemic, the agency said.

“The Ba3 rating on the notes reflects the strategic importance of the Spirit brand and related intellectual property (IP) to the company and the benefits of the loyalty program to Spirit’s day-to-day operations and cash flows, balanced by an expected relatively low recovery if the collateral ever needed to be monetized to pay off the notes,” Moody’s said in a press release.

The outlook for Spirit is negative reflects the possibility of the pandemic causing even more damage to air travel, and the outlook for the notes mirrors Moody’s view the cash flows will be able to comfortably service the interest payments, the agency said.

Moody’s assigns Tenet notes; B2

Moody’s Investors Service said it assigned a Caa1 rating to Tenet Healthcare Corp.’s new senior unsecured notes due 2028. There is no change to the B2 corporate family rating, B2-PD probability of default rating, B1 senior secured first-lien ratings, B1 senior secured second lien ratings and Caa1 senior unsecured ratings for Tenet. There is also no change to the speculative grade liquidity rating of SGL-2.

Moody’s said it expects Tenet will use proceeds, along with cash, to fund the refinancing of roughly $2.5 billion of unsecured bonds that come due in April 2022 and payment of associated breakage costs and fees.

The outlook is stable.

S&P gives Koninklijke FrieslandCampina notes BB+

S&P said it assigned its BB+ issue rating to the proposed €300 million of perpetual subordinated securities to be issued by Koninklijke FrieslandCampina NV.

The agency said it rated the securities down two notches, one for subordination and one for the ability to defer interest payments. Only the company’s ordinary shares will rank lower, S&P said.

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