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Showing posts from December 6, 2018

La Financiere Atalian Downgraded To 'B' On High Leverage; Outlook Stable

French facilities services provider La Financiere Atalian (Atalian), reported weaker EBITDA generation and higher debt than anticipated for the third quarter of 2018. As result, we no longer expect debt to EBITDA to decline below 5x in 2019, but instead to remain above 6x over the next 12 months. Accordingly, we are lowering our rating on Atalian to 'B' from 'B+'. We are also downgrading the company's senior notes to 'B' from 'B+'. The '4' recovery rating is unchanged. The stable outlook reflects our expectation that despite Atalian remaining acquisitive, adjusted leverage will improve to 6x and free operating cash flow will be positive by year-end 2019 as a result of EBITDA growth, realization of synergies, and lower integration costs. PARIS (S&P Global Ratings) Dec. 7, 2018--S&P Global Ratings said today that it lowered its long-term issuer credit rating on France-based La Financiere Atalian SAS (Atalian) to 'B&

Czech Energy Utility ENERGO-PRO Downgraded To 'B+' On Slower Deleveraging Than Expected; Outlook Stable

We have revised down our forecast for Energo-Pro's financial metrics in 2018-2019, due to lower recovery in hydropower generation volumes, growing costs, and exposure to country risks including currency volatility, which in our view offsets the benefits of country diversification. We are therefore lowering our long-term ratings on Energo-Pro to 'B+' from 'BB-'. The stable outlook reflects our expectations that consolidated funds from operations to debt at the level of Energo-Pro's parent, DKHI, will improve above 12% (corresponding to approximately 15% at Energo-Pro), but parent-level free operating cash flow will remain negative because of heavy capital expenditure. MOSCOW (S&P Global Ratings) Dec. 7, 2018--S&P Global Ratings today lowered its long-term issuer credit rating on the Czech electricity multi-utility ENERGO-PRO a.s. (Energo-Pro) to 'B+' from 'BB-'. The outlook is stable. At the same time, we lowered our issu

State Grid International 'A' Rating Affirmed On Likely Disciplined Investment In Higher-Risk Countries; Outlook Stable

State Grid has increased its exposure to high-risk countries after acquiring CPFL and commissioning sizable greenfield projects in Brazil. Outside Brazil, its investments are still geographically diverse, and we expect minimal further new investments in high-risk sovereign jurisdictions. We are affirming our 'A' long-term issuer credit rating on SGID and the 'A' long-term issue rating on the outstanding Euro notes that the company guarantees. The stable outlook reflects the outlook on its parent, SGCC, and our view that SGID will remain a highly strategic subsidiary of SGCC. We also expect SGID to maintain a disciplined investment approach and stable cash flows from its regulated investments. HONG KONG (S&P Global Ratings) Dec. 7, 2018--S&P Global Ratings today affirmed its 'A' long-term issuer credit rating on State Grid International Development Ltd. (SGID). The outlook is stable. At the same time, we also affirmed our 'A' lon

Global Leveraged Capital Credit Opportunity Fund I Ratings Lowered On Two Classes

CENTENNIAL (S&P Global Ratings) Dec. 6, 2018--S&P Global Ratings today lowered its ratings on the class E-1 and E-2 (collectively class E) notes from Global Leveraged Capital Credit Opportunity Fund I, a U.S. collateralized loan obligation transaction that was issued in December 2006 (see list). Today's rating actions follow our review of the notice of proposed forbearance agreement and request for action issued by the trustee on Nov. 26, 2018, and the collateral manager's wind-down plan for the transaction contained therein. Per the indenture, the notes' stated maturity is Dec. 20, 2018, and the only rated notes remaining in the transaction are the class E notes. Through the above-referenced notice, the manager informed the class E noteholders that it intends to allow a nonpayment event of default to occur in order to more effectively wind-down the transaction. Further, the manager requested that the class E noteholders enter into a forbearance agreeme

Airxcel Inc. Placed On CreditWatch With Negative Implications After Third-Quarter Report And Negative RV Industry Trends

Airxcel Inc.'s year-to-date operating results as of third-quarter 2018 are trending below our base-case forecast. We believe this is the result of evolving and unfavorable wholesale shipment trends in the recreational vehicles (RV) industry, which could persist into 2019. As a result, we believe Airxcel's 2018 and 2019 adjusted debt to EBITDA could be higher than we previously expected. We are placing all ratings on Airxcel, including the 'B' issuer credit rating, on CreditWatch with negative implications. We plan to resolve the CreditWatch in the coming months, based on our reassessment of Airxcel's operating performance in light of current negative RV industry trends. NEW YORK (S&P Global Ratings) Dec. 6, 2018- -S&P Global Ratings today took the rating actions listed above. The CreditWatch placement follows Airxcel's year-over-year revenue and adjusted EBITDA decline in third-quarter 2018, the probability that Airxcel's adjusted de

Plenary Properties NDC GP Senior Secured Debt Placed On CreditWatch Negative

S&P Global Ratings placed its 'BBB+' rating on Plenary Properties NDC GP's (NDC) senior secured debt on CreditWatch with negative implications. This action follows the Nov. 14, 2018 placement of all ratings on Johnson Controls International PLC (JCI, BBB+/CW Neg) on CreditWatch Negative. JCI is the guarantor of NDC's operation counterparty, Johnson Controls Canada LP (JCLP). JCI's ratings were placed on CreditWatch, reflecting a one-in-two chance of a one-notch downgrade to 'BBB', as a result of the pending $13.2 billion sale of its Power Solutions Unit. The 'BB' rating on NDC's subordinated debt remains unchanged with a stable outlook. SAN FRANCISCO (S&P Global Ratings) Dec. 6, 2018--S&P Global Ratings today took the rating actions listed above. Plenary Properties NDC GP is a special-purpose vehicle (SPV) owned by Plenary Group (Canada) Ltd. that the Ontario government mandated in 2008 to design, construct, finance,

Ashford, AL GO Warrant Rating Lowered To 'BBB-' From 'A-' On Weak Management Conditions

DALLAS (S&P Global Ratings) Dec. 6, 2018--S&P Global Ratings lowered its long-term rating to 'BBB-' from 'A-' on Ashford, Ala.'s series 2014A general obligation (GO) warrants. At the same time. S&P Global Ratings removed the rating from CreditWatch, where it had been placed with negative implications on Aug. 6, 2018 given uncertainty regarding the city's financial position and management conditions. The outlook is stable. "The rating action reflects our view that management lacks the relevant skills to adequately plan and monitor the city's finances, and that the city does not budget for debt service," said S&P Global Ratings credit analyst Karolina Norris. "The rating also reflects our view of the combination of the turnover in city management coupled with a lack of formalized policies." The stable outlook reflects our view of the city's stable albeit very weak economy and our anticipation that, despite

China Automation Group Ltd. Rating Raised To 'CCC' From 'SD'; Outlook Negative; Issue Rating Withdrawn

We expect CAG to repay its guaranteed outstanding 8.75% senior unsecured guaranteed notes due on Dec. 11, 2018, using new onshore bank loans. In our opinion, the payment risk on CAG's other financial obligations will remain high because the China-based provider of critical control systems and healthcare services still faces significant liquidity shortfall in the next 12 months. We are raising our long-term issuer credit rating on CAG to 'CCC' from 'SD'. We are withdrawing our long-term issue rating on the company's guaranteed notes. The negative outlook reflects our expectation that any weakening in CAG's banking relationships or standing in the capital markets will reduce the company's ability to roll over its short-term borrowings over the next 12 months. HONG KONG (S&P Global Ratings) Dec. 7, 2018--S&P Global Ratings today said it has raised its long-term issuer credit rating on China Automation Group Ltd. (CAG) to 'CCC&#

Christchurch City Council Outlook Revised To Positive From Stable; Ratings Affirmed

OVERVIEW We believe Christchurch City Council could have greater influence over the scope of post-earthquake rebuilding activities after changes to the Regenerate Christchurch board in mid-2019. This could improve our view of the council's financial management. Further, we believe the council's contingent liabilities are decreasing as more of the rebuild is complete. As a result, we are revising our outlook on the long-term rating to positive from stable. At the same time, we are affirming our 'A+' long- and 'A-1' short-term ratings on the council. RATING ACTION On Dec. 7, 2018, S&P Global Ratings revised its outlook on Christchurch City Council (Christchurch) to positive from stable. At the same time, we affirmed our 'A+' long- and 'A-1' short-term ratings on the New Zealand council. OUTLOOK The positive outlook reflects our expectation that the council could have greater influence over the rebuilding of the city when it t

Christchurch City Holdings Ltd. Outlook Revised To Positive From Stable; 'A+/A-1' Ratings Affirmed

The positive outlook reflects the rating outlook on Christchurch City Council, as well as our expectation that Christchurch City Holdings Ltd.'s role will remain critical and its link integral to the council. We are affirming our 'A+/A-1' long- and short-term ratings on CCHL, the investment holding company of Christchurch City Council. Our ratings on CCHL are equalized to those on the council. The ratings on CCHL reflect our assessment that there is an almost-certain likelihood that extraordinary support would be forthcoming from its sole owner, Christchurch City Council, in a distress scenario. MELBOURNE (S&P Global Ratings) Dec. 7, 2018--S&P Global Ratings today revised its outlook on Christchurch City Holdings Ltd. (CCHL) to positive from stable. At the same time, we affirmed our 'A+/A-1' long- and short-term ratings. The positive outlook reflects that on our ratings on Christchurch City Council, as well as our expectation that CCHL's

Japan-Based Power Company JERA Co. Inc. Rated 'A-'; Outlook Stable

JERA will become Japan's largest power generation company when it assumes the domestic thermal power generation businesses of the TEPCO group and Chubu EPCO in April 2019, giving it control of about half of Japan's thermal power generation market. Its profits will remain steady after it takes over the two companies' thermal power generation businesses, thanks to its long-term electricity sales contracts with the two companies and near-monopoly in its supply areas. Certain key financial metrics for JERA are likely to stay slightly weak relative to our rating because JERA will step up investments in power generation facilities and expand its overseas business. We regard TEPCO Holdings, Chubu EPCO, and JERA as a virtual group, and we view JERA as somewhat insulated from the group. We are assigning our 'A-' long-term issuer credit rating to JERA. The stable outlook reflects our view that JERA will generate stable operating cash flow from its domestic the

Generation 2018-2 Retail Auto Mortgage Loan Securitization ABS Assigned Ratings

HONG KONG (S&P Global Ratings) Dec. 7, 2018--S&P Global Ratings today assigned its ratings to the asset-backed securities (ABS) issued by Shanghai International Trust Co. Ltd. as trustee of Generation 2018-2 Retail Auto Mortgage Loan Securitization (see list). The notes are backed by a pool of consumer loan contracts secured by passenger vehicles that were originated by Genius Auto Finance Co. Ltd. (GAFC). The ratings reflect the following factors: The credit risk associated with the underlying collateral portfolio and the credit support available are commensurate with our view of credit risk under 'AA' and 'BBB+' rating stresses. Our assessment of credit risk also takes into account originator GAFC's underwriting standards and centralized approval process, which are comparable to major peers in the China auto finance industry, despite its relatively short operating history. Our capping of the rating on the class A1 and class A2 notes in this

CNN NYC evacuated; Hart quits Oscars; Nauert to UN; new CBS story; Mueller news coming Friday; podcast with Harry Enten; new MoviePass plans

This is a special "morning edition" of the letter. CNN NYC was evacuated after a bomb threat was phoned in on Thursday night. Here's what happened. View this email in your browser!