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Showing posts from February 19, 2019

eHi Car Services Outlook Revised To Negative On Reducing Liquidity Buffer Amid Fleet Expansion; 'BB-' Rating Affirmed

eHi's liquidity buffer is narrowing with reducing covenant headroom as the China-based car rental company continues with its debt-funded fleet expansion. eHi's increasing use of direct program-car agreements with car dealers and OEMs could temper the risk. We believe eHi's revised privatization plan is credit neutral. The two previously contesting buying groups will now merge into one. S&P Global Ratings revised its outlook on eHi to negative from stable. At the same time, we affirmed our 'BB-' long-term issuer credit rating on eHi and our 'BB-' long-term issue rating on its senior unsecured notes. The negative outlook on eHi reflects our expectation that the company is likely to face more challenges in liquidity management over the next 12 months. HONG KONG (S&P Global Ratings) Feb. 20, 2019--S&P Global Ratings today took the rating actions listed above. The outlook revision reflects our view that eHi's liquidity buffer is n

Korea Western Power Co. Ltd.'s Proposed CHF200 Million Senior Unsecured Notes Rated 'AA'

HONG KONG (S&P Global Ratings) Feb. 20, 2019--S&P Global Ratings today said it has assigned its 'AA' long-term issue rating to the Swiss franc (CHF) 200 million senior unsecured notes to be issued by Korea Western Power Co. Ltd. (KOWEPO; AA/Stable/--). The notes will be drawn from KOWEPO's US$2.0 billion global medium-term note program. The company plans to use the proceeds for green, social, and sustainability projects such as renewable energy. The rating on the notes is subject to our review of the final issuance documentation. We view KOWEPO as a core subsidiary of Korea Electric Power Corp. (KEPCO; AA/Stable/A-1+), and therefore equalize the long-term rating on KOWEPO with that on KEPCO. KOWEPO's power generation is integral to KEPCO's role of providing a stable supply of electricity in Korea. KEPCO's six power-generation subsidiaries, including KOWEPO, each account for a key portion of the parent's about 80% share of the national e

Kazakhstan-Based Tsesnabank Ratings Raised To 'B-/B' On Ownership Change And Loan Book Disposal; Outlook Stable

On Feb. 6, 2019, Kazakhstan-based securities firm First Heartland Securities purchased 99.8% of Tsesnabank's ordinary shares and recapitalized the bank for KZT70 billion. Alongside the purchase, government-backed Problem Loans Fund bought an additional KZT604 billion loans from Tsesnabank at book value, therefore providing substantial liquidity support to the bank. We are raising the ratings on Tsesnabank to 'B-/B' from 'SD' (selective default). The stable outlook reflects our view that Tsesnabank's operations have undergone a significant clean-up and that its on-balance-sheet risks have reduced. It also factors in that the bank is still exposed to uncertainties related to further strategy, as well as execution risks. MOSCOW (S&P Global Ratings) Feb. 20, 2019--S&P Global Ratings said today that it had raised to 'B-/B' from 'SD' (selective default) its long- and short-term issuer credit ratings on Tsesnabank. The outlook i

Colorado School of Mines Board of Trustees Bond Outlook Revised To Negative From Stable On Debt Issuance Uncertainty

CHICAGO (S&P Global Ratings) Feb. 19, 2019--S&P Global Ratings has revised its outlook to negative from stable and affirmed its 'A+' rating on the Colorado School of Mines Board of Trustees' institutional enterprise revenue bonds outstanding . "While Mines' enterprise profile remains very strong, the outlook revision reflects the uncertainty surrounding the school's anticipated debt issuance for a facility that will support a collaboration between Mines and the U.S. Geological Survey, which would dilute financial resources compared to debt and elevate the university's debt burden," said S&P Global Ratings credit analyst Jessica Wood. Management reports a potential material par amount of debt, but the level of involvement and debt service support from the government, and the project's potential impact on full accrual operations, is not yet entirely clear. While Mines and the Geological Survey have entered into an agreement o

Jimmy John’s Funding LLC Notes Series 2017-1 Ratings Affirmed

We affirmed our 'BBB (sf)' ratings on three classes from Jimmy John's Funding LLC notes series 2017-1. The affirmations follow a full review based on declining same-store sales for the past eight quarters, as evident in the issuer's quarterly servicer reports. NEW YORK (S&P Global Ratings) Feb. 19, 2019--S&P Global Ratings today affirmed its 'BBB (sf)' ratings on the class A-1, A-2-I, and A-2-II notes from Jimmy John's Funding LLC (series 2017-1). The notes are backed by existing and future U.S. franchise agreements, development agreements and related franchisee royalties and fees, synthetic royalties on existing and future company-owned restaurants and vendor payments and fees, and existing and future U.S. intellectual property. The rating affirmations reflect our opinion of: The strength of the Jimmy John's brand, the likelihood of the brand surviving a Jimmy John's Franchise LLC (the manager) bankruptcy, and the brand&#

Hastings District Council 'AA/A-1+' Ratings Affirmed; Outlook Stable

Hastings District Council's fiscal metrics have temporarily weakened as it rolls out a large program of water infrastructure improvements during 2018 to 2021. As a result, its debt burden is climbing, albeit from a relatively low level. The ratings on Hastings continue to be supported by its robust management, fiscal flexibility, and New Zealand's excellent institutional settings. We are affirming our 'AA' long-term and 'A-1+' short-term issuer credit ratings on Hastings. The outlook on the long-term ratings is stable. RATING ACTION On Feb. 20, 2019, S&P Global Ratings affirmed its 'AA' long-term foreign-currency and local-currency and 'A-1+' short-term issuer credit ratings on Hastings District Council, a New Zealand local government. The outlook on the long-term ratings is stable. OUTLOOK The stable outlook reflects our expectation that Hastings' budgetary performance will be relatively weak during the next two years

Shriram Transport Finance's Proposed U.S. Dollar Senior Secured Notes Under Its MTN Program Assigned 'BB+' Rating

SINGAPORE (S&P Global Ratings) Feb. 20, 2019--S&P Global Ratings today assigned its 'BB+' long-term issue rating to the U.S. dollar-denominated senior secured notes that Shriram Transport Finance Co. Ltd. (STFC: BB+/Stable/B) proposes to issue. The notes are under STFC's Indian rupee 50 billion multi-currency medium-term note (MTN) program. The issue rating is subject to our review of the final issuance documentation. We equalize the rating on the notes with the long-term issuer credit rating on STFC. The notes are direct and unconditional obligations of the company. They are secured and will rank equally, without any preference, among themselves, and with all other outstanding secured and unsubordinated obligations of the issuer. The notes have performance-related covenants, which, if breached, can result in an event of default and early redemption of the notes, subject to approval from the Reserve Bank of India (RBI). These covenants are: STFC'

Banglalink Digital Communications 'BB-' Rating Affirmed On Continued Parent Support; Outlook Stable

We expect Banglalink to receive timely support from its ultimate parent VEON if it is unable to raise funds through local borrowings to refinance its senior unsecured notes due in May 2019. Banglalink faces refinancing risks as it continues to evaluate funding options with just about two months to its sizable debt maturity. We affirmed its 'BB-' long-term issuer credit rating on Banglalink and the 'BB-' long-term issue rating on the Bangladesh-based telecom operator's US$300 million senior unsecured notes. The stable outlook reflects our expectation that Banglalink will have a refinancing plan by the end of March 2019 and maintain its market position over the next 12-24 months. SINGAPORE (S&P Global Ratings) Feb. 20, 2019--S&P Global Ratings today took the rating actions listed above. We affirmed the rating on Bangladesh Digital Communications Ltd. (Banglalink) because we expect ultimate parent, VEON Ltd., to support the company's weaken

iA Financial Corp. Inc. Rated 'A-', iA Financial Group 'A+' Rating Affirmed; Outlook Stable

iA Financial Group (iA) has a new holding company, iA Financial Corp., Inc. (iAFC.) We are rating iAFC 'A-' and affirming our 'A+' rating on iA. The stable outlook means that we are unlikely to change the ratings within the next 18-24 months. CHICAGO (S&P Global Ratings) Feb. 19, 2019--, S&P Global Ratings assigned today an 'A-' long-term issuer credit rating to iA Financial Group's (iA) nonoperating holding company (NOHC), iA Financial Corp. Inc. (iAFC). At the same time, we affirmed our 'A+' financial strength rating on iA. The outlook is stable. iA has maintained its very strong financial risk profile, and its strong business risk profile is improving, in our view, due to its growing sources of noninsurance earnings and its operating performance that compares favorably to peers' in recent years. Therefore, we are affirming our 'A+' financial strength rating. The increase in noninsurance earnings has largely bee

OHA Credit Funding 2 Ltd./OHA Credit Funding LLC Notes Assigned Preliminary Ratings

OHA Credit Funding 2 Ltd.'s issuance is a CLO securitization backed by primarily broadly syndicated speculative-grade senior secured term loans that are governed by collateral quality tests. We assigned our preliminary ratings to the class X, A-1, B, C, D, E, and F notes. The preliminary ratings reflect our view of the transaction's diversified collateral pool, credit enhancement, and legal structure, among other factors. NEW YORK (S&P Global Ratings) Feb. 19, 2019--S&P Global Ratings today assigned its preliminary ratings to OHA Credit Funding 2 Ltd./OHA Credit Funding 2 LLC's floating-rate notes (see list). The note issuance is collateralized loan obligation (CLO) securitization backed by primarily broadly syndicated speculative-grade senior secured term loans that are governed by collateral quality tests. The preliminary ratings are based on information as of Feb. 19, 2019. Subsequent information may result in the assignment of final ratings t

Various Rating Actions Taken On 48 Classes From Six U.S. RMBS Transactions

We reviewed 48 ratings from six U.S. RMBS transactions issued between 2002 and 2005. All of these transactions are backed by prime jumbo and subprime collateral. Of the 48 ratings, we lowered seven and affirmed 41. CENTENNIAL (S&P Global Ratings) Feb. 19, 2019--S&P Global Ratings today completed its review of 48 ratings from six U.S. residential mortgage-backed securities (RMBS) transactions issued between 2002 and 2005. All of these transactions are backed by prime jumbo and subprime collateral. The review yielded seven downgrades and 41 affirmations. Analytical Considerations We incorporate various considerations into our decisions to raise, lower, or affirm ratings when reviewing the indicative ratings suggested by our projected cash flows. These considerations are based on transaction-specific performance or structural characteristics (or both) and their potential effects on certain classes. Some of these considerations include: Collateral performance/de

HSBC Bank Bermuda Ltd. Outlook Revised To Stable From Negative On Encouraging Indicators; Ratings Affirmed

We continue to see encouraging recent economic indicators in Bermuda, the principal jurisdiction of operations for HSBC Bank Bermuda (HBBM), one of two banks that control the vast majority of the local market. A strategy update by the bank's parent (HSBC Holdings PLC) appears to have concluded without meaningfully reducing HBBM's strategic importance to the group, lowering the likelihood of this downside risk. We believe the likelihood that future capital payouts to the parent are as high a share of annual net income as the amounts paid in 2016 and certain previous years is also lower. In light of this, we now view the probability of upside and downside movement in the ratings as approximately balanced. Therefore, we are revising our outlook on HBBM to stable from negative and affirming our 'A-/A-2' issuer credit ratings on the bank. TORONTO (S&P Global Ratings) Feb. 19, 2019--S&P Global Ratings said today it revised its outlook on HSBC Bank Be

Neovia Logistics L.P. Rating Lowered To 'CCC' On Near-Term Maturities; Debt Ratings Lowered; Outlook Negative

Neovia Logistics L.P. faces maturities across its capital structure over the next 18 months. Its revolving credit facility (of which $48 million is drawn) matures in February 2020, its $76.6 million unsecured payment-in-kind (PIK) notes mature in April 2020, and its $465 million senior secured notes mature in August 2020. We believe that the company's liquidity is insufficient to repay the revolver. We would expect that the company would also need to address its other upcoming maturities, which could lead to an exchange offer that we would classify as distressed and tantamount to a default. Therefore, we are lowering our issuer credit rating on Neovia to 'CCC' from 'CCC+'. The outlook is negative because we view the company as vulnerable to a payment default or distressed exchange over the next year. At the same time, we are lowering our issue-level ratings on the company's senior secured notes to 'CCC' from 'CCC+' with the '4&#

Tivity Health Inc. Assigned 'B+' Issuer Credit Rating Following Nutrisystem Inc. Acquisition; Outlook Stable

Tivity Health, Inc. plans to issue a $125 million revolving credit facility (RCF), $400 million first-lien term loan A and $780 million first-lien term loan B to finance its acquisition of Nutrisystem Inc., a weight management products and service provider. We assigned our 'B+' issuer credit rating to Tivity Health. The stable outlook reflects our expectation that integrating Nutrisystem will result in mid-single-digit percent revenue growth that expands EBITDA. We believe the company's strong free cash flow generation, along with cost efficiencies, will result in sustained adjusted leverage of approximately 4.6x by the end of 2019. We also assigned our 'B+' issue-level and '3' (65%) recovery ratings to the company's proposed $125 million RCF due 2024, $400 million first lien term loan A due 2024 and $780 million first lien term loan B due 2026. NEW YORK (S&P Global Ratings) Feb. 19, 2019--S&P Global Ratings today took the rating

Residential Mortgage Loan Trust 2019-1 Notes Assigned Ratings

Residential Mortgage Loan Trust 2019-1's issuance is an RMBS transaction backed by U.S. residential mortgage loans. We assigned our ratings to the class A-1, A-2, A-3, M-1, B-1, and B-2 notes. The ratings reflect our view of the transaction's credit enhancement, pool composition, and associated structural mechanics, among other factors. NEW YORK (S&P Global Ratings) Feb. 19, 2019--S&P Global Ratings today assigned its ratings to Residential Mortgage Loan Trust 2019-1's mortgage-backed notes (see list). The note issuance is a residential mortgage-backed securities transaction backed by first-lien, fixed- and adjustable-rate, amortizing (some with interest-only periods) residential mortgage loans secured by single-family residences, planned-unit developments, two- to four-family residences, and condominiums to both prime and nonprime borrowers. The pool has 574 loans, which are primarily non-qualified mortgage loans. The ratings reflect: The pool

Eli Lilly & Co. Rating Lowered To 'A+', Outlook Stable Following Loxo Oncology Acquisition

Pharmaceutical maker Eli Lilly & Co. completed its acquisition of Loxo Oncology Inc., an early-stage precision medicine oncology company, for a $7.2 billion purchase price (net of cash at the target) using a combination of cash and debt. Although we believe the transaction benefits Eli Lilly's position in the attractive and rapidly evolving oncology market, this improvement is more than offset by the substantial increase in adjusted debt leverage. We expect adjusted leverage to rise to roughly 2.0x for 2019, well above recent levels of roughly 1.0x. We are lowering our rating on the company to 'A+', and removing it from CreditWatch with negative implications. The stable outlook reflects the company's strong pipeline, organic revenue growth above peers, and substantial margin expansion. It also reflects our base-case expectation for leverage to generally improve from current levels, despite our view that the company's appetite for acquisitions may

Integrated Utility Holding (Aqualectra) Downgraded To 'BBB+' From 'A-' On Similar Action On Curacao; Outlook Stable

On Feb. 18, 2019, we lowered the rating on Curacao to 'BBB+' from 'A-', and the outlook on the rating is now stable. Consequently, we analyzed the impact of the downgrade on domestic government-related entities (GREs). As a result, we downgraded the electric water utility, Integrated Utility Holding N.V. (Aqualectra), to 'BBB+' from 'A-'. The outlook is now stable. Additionally, its 'bb-' stand-alone credit profile (SACP) remains unchanged. The stable outlook on the company reflects that on the sovereign and our expectations that Aqualectra will almost certainly receive timely and sufficient extraordinary support from Curacao's government, in the event of financial distress, and that the company's close ties with the sovereign will remain unchanged for the near future. MEXICO CITY (S&P Global Ratings) Feb. 19, 2019--S&P Global Ratings took rating actions described above. The downgrade of Aqualectra reflects a si

The Toro Co. Ratings Affirmed On Acquisition Of Charles Machine Works, Outlook Remains Stable

Bloomington, Minn.-based turf maintenance, landscaping, and agricultural equipment manufacturer The Toro Co. has signed a definitive agreement to acquire the Charles Machine Works (CMW), a Perry, Okla.-based underground construction equipment manufacturer, for $700 million. Although Toro will fund the transaction with debt, we expect its credit measures to remain within our expectations for the current rating. In addition, the acquisition does not meaningfully affect our overall assessment of Toro's business risk despite our expectation that it will enhance the competitive position of the company's specialty construction product line in its professional business. S&P Global Ratings affirmed all of its ratings on The Toro Co., including the 'BBB' issuer credit rating and our 'BBB' issue-level rating on its senior unsecured debt. The stable outlook reflects our expectation that the company will be able to effectively integrate CMW, which--along

Fortive Corp. Ratings Affirmed Following Proposed $1.25 Billion Convertible Debt Offering; New Debt Ratings Assigned

Fortive Corp. has announced a proposed $1.25 billion in convertible notes as part of its financing for Advanced Sterilization Products. We affirmed all our ratings on Fortive, including the 'BBB' issuer credit rating and issue-level ratings. We also assigned our 'BBB' issue-level rating to the proposed notes. The outlook is stable, reflecting our expectation that Fortive's strong cash flow generation will support debt reduction following the increase in funded debt to finance acquisitions. NEW YORK (S&P Global Ratings) Feb. 19, 2019--S&P Global Ratings today took the rating actions listed above. The rating affirmation reflects the improved product and end market diversity, higher recurring revenue streams, and continued strong free cash flow generation despite adjusted debt to EBITDA being slightly elevated over the next 12 months. Fortive had a very active 2018, closing on Gordian for $775 million in July and following that up with Accruent

IR-2019-19: Farmers, fishermen face March 1 tax deadline; IRS encourages convenience of IRS Direct Pay

Issue Number:    IR-2019-19 Inside This Issue Farmers, fishermen face March 1 tax deadline; IRS encourages convenience of IRS Direct Pay WASHINGTON — The Internal Revenue Service reminds farmers and fishermen who chose to forgo making quarterly estimated tax payments that they must file their 2018 Form 1040 along with a payment for all taxes owed by Friday, March 1, 2019. This special rule normally applies to taxpayers whose farming or fishing income was at least two-thirds of their total gross income in either the current or the preceding tax year. Farmers and fishermen choosing not to file by March 1 should have made an estimated tax payment by Jan. 15 to avoid a penalty. IRS Direct Pay is safe, free IRS Direct Pay is a secure and easy way to quickly pay the tax amount due or make quarterly estimated tax payments directly from checking or savings accounts without any fees or pre-registration. It can be used to pay taxes for Forms 1040, estimated taxes or ot

Provident Funding Associates L.P. Downgraded To 'B-' Following Continued Weak Operating Performance; Outlook Stable

Provident Funding posted weaker-than-expected operating performance again in 3Q 2018 as debt to EBITDA remains above 11x, while EBITDA and origination volume has not rebound as expected. We expect difficult operating conditions to persist over the next year. As a result, we are lowering our issuer credit rating to 'B-' from 'B'. At the same time, we are lowering our rating on the company's senior unsecured notes to 'B-' from 'B+'. The stable outlook reflects our expectation for the company's leverage, as measured by debt to EBITDA, will remain above 11x over the next 12 months, as well as debt to tangible equity above 2x. NEW YORK (S&P Global Ratings) Feb. 19, 2019-- S&P Global Ratings said today it lowered its issuer credit rating on Provident Funding Associates L.P. to 'B-' from 'B'. The outlook is stable. At the same time, we lowered our rating on Provident's $325 million senior unsecured notes due

IR-2019-18: Avoid the rush: Today marks busiest phone day of the year; check IRS.gov for answers to tax questions

Issue Number:    IR-2019-18 Inside This Issue Avoid the rush: Today marks busiest phone day of the year; check IRS.gov for answers to tax questions WASHINGTON — The Internal Revenue Service alerted taxpayers that today, the day after Presidents Day, marks the busiest period for calls to its toll-free help line. The IRS reminded taxpayers that most answers to their tax questions can be quickly found on IRS.gov. Taxpayers who call the IRS the day after Presidents Day can expect longer than usual wait times. Those who need to call can avoid the rush by waiting a day or two or by using online options to get their tax questions answered quickly. A good first stop is the IRS Services Guide, which provides an overview of the many IRS.gov tools available to taxpayers and tax professionals. For fast answers to general tax questions, taxpayers can search the Interactive Tax Assistant, Tax Topics, Frequently Asked Questions, Tax Trails and IRS Tax Map. Publication 5307,

Deephaven Residential Mortgage Trust 2019-1 Notes Assigned Ratings

Deephaven Residential Mortgage Trust 2019-1's issuance is an RMBS transaction backed by U.S. residential mortgage loans. We assigned our ratings to the class A-1, A-2, A-3, M-1, B-1, and B-2 notes. The ratings reflect our view of the transaction's credit enhancement, pool composition, and associated structural mechanics, among other factors. NEW YORK (S&P Global Ratings) Feb. 19, 2019--S&P Global Ratings today assigned its ratings to Deephaven Residential Mortgage Trust 2019-1's mortgage-backed notes (see list). The note issuance is a residential mortgage-backed transaction backed by first-lien, fixed- and adjustable-rate, amortizing (with some interest-only and principal balloon payments) residential mortgage loans secured by single-family residences, planned-unit developments, two- to four-family residences, and condominiums to both prime and nonprime borrowers. The pool has 809 loans, which are primarily non-qualified mortgage loans. The rati

Davis Joint Unified School District, CA GO Bond Outlook Revised To Negative On Ongoing Deficits

CENTENNIAL (S&P Global Ratings) Feb. 19, 2019--S&P Global Ratings revised its outlook to negative from stable and affirmed its 'AA-' long-term rating on Davis Joint Unified School District, Calif.'s general obligation (GO) bonds and its 'A+' long-term rating on the district's existing certificates of participation (COPs). At the same time, S&P Global Ratings assigned is 'AA-' long-term rating to the district's $50.3 million series 2019 (election of 2018) GO bonds. "The revised outlook reflects our view of the district's significant draw down on reserves in fiscal 2018, with the anticipation that the district will end fiscal 2019 with another deficit," said S&P Global Ratings credit analyst David Mares. "While the district has identified expenditure cuts and methods to eliminate the operational deficit, its reserves could still dip below levels that we consider good. Further, should an economic downturn o