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Showing posts from March 7, 2019

Vedanta Resources Ltd. Outlook Revised To Negative On Weaker Operating Performance; 'B+' Ratings Affirmed

Softer base metal and oil prices and declining but still elevated input costs for aluminum will likely keep Vedanta Resources' profitability and cash flows lower than our previous expectations. Elevated debt due to growth investments and privatization is unlikely to reduce meaningfully and should keep Vedanta Resources' cash flow leverage higher than levels commensurate with a B+ rating. On March 8, 2019, S&P Global Ratings revised its outlook on Vedanta Resources Ltd. to negative from stable. At the same time, we affirmed our 'B+' long-term foreign currency issuer credit rating on the India-based commodities producer and our 'B+' long-term issue rating on the various U.S. dollar denominated senior unsecured notes the company issued. The negative outlook reflects the likelihood of a lower rating on Vedanta Resources over the next nine months if the company's operating performance does not improve more than we expect or and its high debt ke

Cleaver-Brooks Inc. Outlook Revised To Negative On Weaker-Than-Expected Operating Performance; Ratings Affirmed

U.S.-based boiler, burner, and heating system manufacturer Cleaver-Brooks Inc. reported weaker-than-expected revenue and profitability, resulting in adjusted debt to EBITDA for the last 12 months rising to 7.0x as of Dec. 30, 2018. As a result, we affirmed our 'B' issuer credit rating on Cleaver-Brooks and revised the rating outlook to negative from stable. We also affirmed our 'B' issue-level ratings on the company's senior secured notes. The '4' recovery rating is unchanged. We affirmed our 'BB-' issue-level ratings on the asset-based lending (ABL) facility and subsequently withdrew them at the request of the Issuer. The negative outlook reflects our view that intensifying competition, heightened uncertainty related to project bidding, and the negative impact of rising material costs could cause leverage to remain above 7.0x. CENTENNIAL (S&P Global Ratings) March 7, 2019—S&P Global Ratings today took the rating actions lis

Platte County, WY Revenue Bond Rating Raised To 'A+' On Improved Economy

SAN FRANCISCO (S&P Global Ratings) March 7, 2019--S&P Global Ratings raised its long-term rating to 'A+' from 'A' on Platte County Capital Construction Corp., Wyo.'s series 2007 lease revenue refunding bonds, supported by Platte County. The outlook is stable. "The rating action reflects our view of the Platte County's improved underlying economy and continued diversification of its tax base," said S&P Global Ratings credit analyst Brian Phuvan. The stable outlook reflects our expectation that the county's budgetary performance will remain strong and that budgetary flexibility will remain very strong, given its stabilized property tax revenue and maintenance of very strong available reserves with no one-time spending.

GOME Retail Holdings Downgraded To 'B+' On Delayed Turnaround; Outlook Negative; Issue Rating Lowered To 'B'

In our view, GOME's revenue and margins will remain under pressure as the China-based consumer and electrical appliance retailer fights to regain lost market share. We expect GOME's debt leverage to only partially recover after last year's deterioration, because the company's strategies to fend off intense online competition have yet to bear fruit. On March 8, 2019, S&P Global Ratings lowered its long-term issuer credit rating on GOME to 'B+' from 'BB-'. We also lowered the long-term issue rating to 'B' from 'B+' on the company's US$500 million senior unsecured notes. The negative outlook reflects our expectation of potential downside to GOME's operating performance over the next 12 months due to uncertainty around the company's turnaround strategy in a challenging market environment. HONG KONG (S&P Global Ratings) March 8, 2019--Our downgrade and negative outlook on GOME Retail Holdings Ltd. (GOME)

Thor Industries Inc. Outlook Revised To Negative On Significant Shipment Decline; 'BB' Rating Affirmed

Thor Industries Inc. reported operating results through the second-quarter of fiscal 2019 that significantly under-performed our expectations, and the company remains under pressure from an ongoing inventory correction in the recreational vehicle (RV) industry. Our revised forecast is for pro forma adjusted debt to EBITDA to be in the 3.5x area in fiscal 2019. As a result, we are revising our rating outlook on Thor to negative from stable. We are also affirming the 'BB' issuer credit rating on the company and the 'BB' issue-level rating on its term loan B. The negative outlook reflects our updated forecast that Thor will not have a cushion in fiscal 2019 compared to our 3.25x leverage downgrade threshold and the possibility that the current inventory correction may not recover by fiscal 2020 in a manner that enables Thor to resume wholesale shipment growth and reduce leverage to under the threshold. NEW YORK (S&P Global Ratings) March 7, 2019—S&

Morgan Stanley Capital I Trust 2008-TOP29 Ratings Lowered On Two Classes

We lowered our ratings on two classes from Morgan Stanley Capital I Trust 2008-TOP29, a U.S. CMBS transaction, due to ongoing interest shortfalls. The downgrades reflect our analysis of the transaction, which included a review of the credit characteristics and performance of the remaining assets in the pool, the transaction's structure, and the liquidity available to the trust. NEW YORK (S&P Global Ratings) March 7, 2019-- S&P Global Ratings today lowered its ratings on two classes of commercial mortgage pass-through certificates from Morgan Stanley Capital I Trust 2008-TOP29, a U.S. commercial mortgage-backed securities (CMBS) transaction (see list). The downgrades on classes F and G reflect ongoing interest shortfalls as well as credit support erosion that we anticipate will occur upon the eventual resolution of the three assets ($26.3 million, 100.0%) with the special servicer (discussed below). Specifically, we lowered our rating

Owego, NY Series 2019 Public Improvement Serial Bonds Rated 'AA-'

NEW YORK (S&P Global Ratings) March 7, 2019--S&P Global Ratings assigned its 'AA-' long-term rating to the town of Owego, N.Y.'s series 2019 public improvement serial bonds. The outlook is stable. The bond proceeds will be used to construct a new shared service building for various town departments. "The rating reflects our view of the town's history of strong operating performance, resulting in very strong fund balances in excess of 200% of its expenditures," said S&P Global Ratings credit analyst Lauren Freire. Operationally, the town's revenue mix is stable, with property and nonproperty taxes accounting for about 50% of revenue. Despite not participating in a broad and diverse metropolitan statistical area, the local economy is stable, in our opinion, albeit significantly concentrated. The town, with an estimated population of 18,924, is the largest of its kind in the Tioga County, which contains the county's seat. The s

Alameda Municipal Power, CA Revenue Bond Rating Raised To 'AA-' On Criteria Update

CENTENNIAL (S&P Global Ratings) March 7, 2019--S&P Global Ratings raised its long-term rating to 'AA-' from 'A+' on Alameda Municipal Power (AMP), Calif.'s electric revenue bonds. The outlook is stable. The rating action reflects the application of our criteria "U.S. Municipal Retail Electric And Gas Utilities: Methodology And Assumptions," published Sept. 27, 2018 on RatingsDirect. "The rating reflects our opinion of AMP's very strong enterprise and financial risk profiles, which in turn reflect such factors as a diverse resource portfolio, solid fixed-charge coverage, substantial liquidity, and a manageable debt-to-capitalization ratio," said S&P Global Ratings credit analyst Timothy Meernik. The stable outlook reflects our view of AMP's residential customer base with high incomes that provide a consistent and steady source of revenue, a diverse and largely carbon-free power supply, and robust policies and plann

ABPCI Direct Lending Fund CLO V Ltd. Notes Assigned Ratings

ABPCI Direct Lending Fund CLO V Ltd.'s issuance is a CLO transaction backed by primarily middle-market speculative-grade senior secured term loans that are governed by collateral quality tests. We assigned our ratings to the class A-1, A-2A, A-2B, B, and C notes and the class A-1L loan. The ratings reflect our view of the transaction's diversified collateral pool, credit enhancement, and legal structure, among other factors. CENTENNIAL (S&P Global Ratings) March 7, 2019--S&P Global Ratings today assigned its ratings to ABPCI Direct Lending Fund CLO V Ltd.'s fixed- and floating-rate debt (see list). The debt issuance is a collateralized loan obligation (CLO) transaction backed by primarily middle-market speculative-grade senior secured term loans that are governed by collateral quality tests. The ratings reflect: The diversified collateral pool; The credit enhancement provided through the subordination of cash flows, excess spread, and overcolla

Zayo Group LLC 'B+' Rating Placed On CreditWatch Negative As Company Explores Strategic Alternatives

U.S.–based fiber infrastructure and colocation provider Zayo Group LLC announced that it is evaluating strategic alternatives following the postponement of its Analyst Day. We are placing our 'B+' issuer credit rating on Zayo on CreditWatch with negative implications. While the outcome of the strategic review is uncertain, we believe it is likely that Zayo will be sold to a financial sponsor, which could result in higher leverage. We intend to resolve the CreditWatch in the coming months as more information becomes available. NEW YORK (S&P Global Ratings) March 7, 2019--S&P Global Ratings today took the rating actions listed above. The CreditWatch placement follows Zayo's announcement that management is evaluating strategic alternatives following the postponement of its Analyst Day, scheduled for March 14, 2019. A take-private transaction by a financial sponsor could result in leverage rising above 6.5x, the trigger for the rating. However, adjuste

SunOpta Inc. Downgraded To 'CCC+' From 'B-' On Weakening Credit Measures; Outlook Negative

SunOpta Inc.'s 2018 EBITDA was weaker than expected and we project the company's 2019 results will also be lower than our previous forecast As a result, we forecast 2019 S&P Global Ratings-adjusted debt-to-EBITDA to remain about 11x, similar to 2018 year-end results. Ongoing challenges in SunOpta's operations led to the lower EBITDA that, combined with higher revolver borrowings, has resulted in the company's significantly weaker credit measures. Therefore, S&P Global Ratings lowered its issuer credit rating on SunOpta to 'CCC+' from 'B-'. We also lowered our issue-level rating on subsidiary SunOpta Foods Inc.'s senior secured notes to 'CCC' from 'CCC+'. The recovery rating on the notes is unchanged at '5'. The negative outlook reflects our view of the execution risk involved in SunOpta's implementation of the value creation plan in the next 12 months, which if successful will return EBITDA m

Bedford County, TN GO Refunding Bonds Assigned 'A+' Rating

DALLAS (S&P Global Ratings) March 7, 2019--S&P Global Ratings assigned its 'A+' long-term rating to Bedford County, Tenn.'s series 2019 general obligation (GO) refunding bonds. The outlook is stable. Bond proceeds will be used to refund existing debt of the county for expected net present value savings with no extension of maturity. "The rating reflects our assessment of such factors as the county's strong budgetary performance and very strong budgetary flexibility and liquidity," said S&P Global Ratings credit analyst Joshua Travis. The stable outlook reflects our anticipation that the local economy will remain stable, with continued tax base growth likely.

Floyd County School District, GA GO Sales Tax Bond Rating Suspended On Lack Of Timely Information

DALLAS (S&P Global Ratings) March 7, 2019--S&P Global Ratings suspended its underlying rating on Floyd County School District, Ga.'s series 2014 and 2018 general obligation (GO) sales tax bonds. This action follows repeated attempts by S&P Global Ratings to obtain timely information of satisfactory quality to maintain our rating on the securities in accordance with our applicable criteria and policies. Prior to suspending the rating, S&P Global Ratings took any rating action on the issuer that we considered appropriate given available information. We understand that the Georgia Department of Audits and Accounts is finalizing the fiscal 2017 audit, as required by state law. To satisfy our quality-of-information standards and maintain the rating, we expected to receive the audit by year end. If the audit is completed and we receive information that we consider sufficient and of satisfactory quality, we will conduct a review and take a rating action withi

Ares LI CLO Ltd. Notes Assigned Ratings

Ares LI CLO Ltd.'s issuance is a CLO transaction backed by primarily broadly syndicated speculative-grade senior secured term loans. We assigned our ratings to the class A-1, B, C, and D notes. The ratings reflect our view of the transaction's diversified collateral pool, credit enhancement, and legal structure, among other factors. CENTENNIAL (S&P Global Ratings) March 7, 2019--S&P Global Ratings today assigned its ratings to Ares LI CLO Ltd.'s floating-rate notes (see list). The note issuance is a collateralized loan obligation (CLO) transaction backed by primarily broadly syndicated speculative-grade senior secured term loans. The ratings reflect: The diversified collateral pool. The credit enhancement provided through the subordination of cash flows, excess spread, and overcollateralization. The collateral manager's experienced team, which can affect the performance of the rated notes through collateral selection, ongoing portfolio mana

Ratings Assigned To Six Classes From ALM XIX Ltd. In Connection With Refinancing

ALM XIX Ltd./ALM XIX LLC refinanced its class A-1, A-2, B, C, and D notes on March 7, 2019, through an optional redemption and replacement note issuance. After analyzing the changes to the transaction, we assigned our ratings to the replacement class X-R, A-1a-R, A-2-R, B-R, C-R, and D-R notes. The assigned ratings reflect our opinion that the credit support available is commensurate with the associated rating levels. NEW YORK (S&P Global Ratings) March 7, 2019--S&P Global Ratings today assigned its ratings to the class X-R, A-1a-R, A-2-R, B-R, C-R, and D-R replacement notes from ALM XIX Ltd./ALM XIX LLC, a collateralized loan obligation (CLO) originally issued in 2016 and managed by Apollo Credit Management (CLO) LLC (see list). The replacement notes were issued via a supplemental indenture. S&P Global Ratings did not rate the original transaction. On the March 7, 2019, refinancing date, the proceeds from the issuance of the class X-R, A-1a-R, A-2-R, B-R,

OneMain Direct Auto Receivables Trust 2019-1 Notes Assigned Preliminary Ratings

OneMain Direct Auto Receivables Trust 2019-1's issuance is an ABS transaction backed by direct auto loan receivables. We assigned our preliminary ratings to the class A, B, C, and D notes. The preliminary ratings reflect our view of the transaction's available credit enhancement, pool characteristics, and payment and legal structures, among other factors. NEW YORK (S&P Global Ratings) March 7, 2019--S&P Global Ratings today assigned its preliminary ratings to OneMain Direct Auto Receivables Trust 2019-1's direct auto loan-backed notes (see list). The note issuance is an asset-backed securities transaction backed by direct auto loan receivables. The preliminary ratings are based on information as of March 7, 2019. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: The availability of approximately 35.1%, 25.7%, 19.6%, and 14.5% credit support to the class

AqGen Ascensus Inc. 'B-' Rating Affirmed Following Dividend Recapitalization; Outlook Stable

Dresher, Pa.-based retirement, health and government savings plan administrator and record-keeper AqGen Ascensus Inc. (Ascensus) is recapitalizing its balance sheet following the sale of approximately a 25% minority interest to a group led by Atlas Merchant Capital LLC. The recapitalization includes a $94 million add-on to the existing first-lien term loan, a $168 million add-on to the existing second-lien term loan, and a $54 million upsizing of its revolving credit facility. Pro forma for the transaction and a $138 million shareholder distribution, we expect leverage to increase to over 9.0x. On March 7, 2019, S&P Global Ratings affirmed all ratings, including the 'B-' issuer credit rating, 'B-' issue-level rating on the first-lien facility, and 'CCC' issue-level rating on the second-lien facility. The recovery ratings remain '3' and '6', respectively. The stable outlook reflects our view that despite very high pro forma le

Sierra Timeshare 2019-1 Receivables Funding LLC Notes Assigned Preliminary Ratings

Sierra Timeshare 2019-1 Receivables Funding LLC's note issuance is an ABS transaction backed by vacation ownership interval (timeshare) loans. We assigned our preliminary ratings to the class A, B, C, and D notes. The preliminary ratings reflect our opinion of the credit enhancement available in the form of subordination, overcollateralization, a reserve account, and available excess spread, among other factors. NEW YORK (S&P Global Ratings) March 7, 2019--S&P Global Ratings today assigned its preliminary ratings to Sierra Timeshare 2019-1 Receivables Funding LLC's timeshare loan-backed notes (see list). The note issuance is asset-backed securities (ABS) transaction backed by vacation ownership interval (timeshare) loans. The preliminary ratings are based on information as of March 7, 2019. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect our opinion of the c

Lakeview Public Schools, MI GO Rating Outlook Revised To Stable From Negative On Strong Finances, Consistent Surpluses

NEW YORK (S&P Global Ratings) March 7, 2019--S&P Global Ratings revised the outlook on its 'A+' underlying rating for credit program on Lakeview Public Schools, Mich.'s general obligation (GO) debt to stable from negative and affirmed the rating. The outlook revision reflects S&P Global Ratings' opinion of the district posting three consecutive general fund surpluses, coupled with the expectation of it posting positive general fund operations until available reserves comply with the reserve policy of maintaining 8%-12% of expenditures. "We do not expect to change the rating during the outlook's two-year period. However, we could lower the rating if budgetary performance were to weaken, resulting in available fund balance deteriorating to levels we consider adequate or lower," said S&P Global Ratings credit analyst Michael Mooney. "Barring no deterioration in any other credit factors, if management were to continue to post

Lindblad Expeditions Holdings Inc. Outlook Revised To Stable; Ratings Affirmed

U.S.-based expedition cruise operator Lindblad Expeditions Holdings Inc. continues to generate good EBITDA growth, which we believe will continue through 2020 and translate into adjusted leverage remaining below the mid-3x area. On March 7, 2019, S&P Global Ratings revised its outlook on Lindblad to stable from negative, and affirmed all ratings on the company, including the 'BB-' issuer credit rating. The stable outlook reflects our forecast for good EBITDA growth to offset modest increases in debt balances for growth capital expenditures. We believe adjusted leverage will remain below the mid-3x area through 2020, providing sufficient cushion relative to our 4x downgrade threshold to withstand a modest level of EBITDA volatility. NEW YORK (S&P Global Ratings) March 7, 2019-- S&P Global Ratings today took the rating actions listed above. We believe good EBITDA growth through 2020, driven by capacity growth (a full year of the National Geographic Ve

Ratings Raised on Nineteen Classes From Seven American Credit Acceptance Receivables Trust Deals; Two Ratings Affirmed

American Credit Acceptance Receivables Trust 2015-3, 2016-1, 2016-2, 2016-3, 2016-4, 2017-3, and 2017-4 are subprime auto loan securitizations, mainly backed by used vehicles, for which American Credit Acceptance LLC is the originator and servicer of the loans. We raised our ratings on 19 classes of notes from seven American Credit Acceptance Receivables Trust transactions. At the same time, we affirmed our ratings on two classes of notes from series 2015-3 and 2016-2. The rating actions reflect our views regarding future collateral performance, as well as each transaction's structure and credit enhancement, among other factors. NEW YORK (S&P Global Ratings) March 7, 2019--S&P Global Ratings today raised its ratings on 19 classes of notes from American Credit Acceptance Receivables Trust 2015-3, 2016-1, 2016-2, 2016-3, 2016-4, 2017-3, and 2017-4. At the same time, we affirmed our ratings on two classes of notes from American Credit Acceptance Receivables T

Hendrix College, AR Bond Ratings Lowered To 'BBB' On Lower Enrollment; Outlook Stable

CHICAGO (S&P Global Ratings) March 7, 2019--S&P Global Ratings has lowered its long-term rating on the Arkansas Development Finance Authority's series 2012A and 2012B revenue bonds and series 2016 revenue-refunding bonds, issued for Hendrix College, to 'BBB' from 'BBB+'. The outlook is stable. "We lowered the rating because of pressure on the enterprise profile after the college missed its enrollment targets for its second consecutive year in fall 2018 despite having several initiatives in place, leading to five continuous years of declines in total full-time equivalents," said S&P Global Ratings credit analyst Gauri Gupta. At the same time, the college's incoming freshmen applications have also declined significantly year over year. In addition, the college has an extremely high tuition discount rate and coupled with enrollment pressures, net tuition revenues have seen significant declines inducing a high reliance on draw from

Tax Reform Tax Tip 2019-20: Taxpayers must report health care coverage on 2018 tax return

Issue Number:    Tax Reform Tax Tip 2019-20 Taxpayers must report health care coverage on 2018 tax return As taxpayers are completing their 2018 tax returns this year, they must complete the lines related to health care. For tax year 2018, the IRS will not consider a return complete and accurate if individuals do not do one of the following on their return: Report full-year health coverage Claim a coverage exemption Report and make a shared responsibility payment for everyone on the tax return The law continues to require taxpayers who do not qualify for an exemption to maintain health care coverage in 2018 or make a shared responsibility payment when they file their tax return.  Most taxpayers have qualifying health coverage or a coverage exemption for all 12 months in the year and will check the box on the front of their tax return. Taxpayers who can check the box don't have to file Form 8965, Health Coverage Exemptions, to claim any coverage exe

Nine Ratings Raised And Two Affirmed On Five DT Auto Owner Trust Transactions

We reviewed five series from DT Auto Owner Trust, which are backed by subprime retail auto loan sales receivables originated by DriveTime Car Sales Co. LLC. We raised our ratings on nine classes and affirmed our ratings on two classes from five transactions. The rating actions reflect our views regarding future collateral performance and each transaction's structure, credit enhancement, and remaining cumulative net loss expectations, among other factors. New York (S&P Global Ratings) March 6, 2019--S&P Global Ratings today raised its ratings on nine classes and affirmed its ratings on two classes from five DT Auto Owner Trust transactions (see list). Today's rating actions reflect each transaction's collateral performance to date, our views regarding future collateral performance, and each transaction's structure, credit enhancement levels, and remaining cumulative net loss expectations. In addition, we incorporated secondary credit factors in

Florida 2019A PECO Bonds Assigned 'AAA' Rating; Other Ratings Affirmed

CHICAGO (S&P Global Ratings) March 7, 2019--S&P Global Ratings assigned its 'AAA' long-term rating to Florida State Board of Education's public education capital outlay (PECO) refunding bonds, series 2019A. At the same time, S&P Global Ratings affirmed its 'AAA' general obligation (GO) rating on the state's parity debt and its 'AA+' rating on the state's appropriation debt. The outlook on all ratings is stable. "The rating reflects our view of Florida's continued good employment and population growth, although with a service-based economy that revolves around tourism and in-migration, and continued good general revenue growth and revenue collections through December 2018 that exceed estimates and previous-year collections," said S&P Global Ratings credit analyst Carol Spain. Other factors include our opinion of the state's: Structural budgetary balance; Reserves that, coupled with trust fund reserves,

Indivior PLC Outlook Revised To Negative On New Competition From Generic Drugs; Ratings Affirmed

Indivior PLC is now facing immediate generic competition to its top product SUBOXONE film (an oral treatment for opioid dependence), which accounted for over 80% of its 2018 sales. As a result, we are anticipating negative to modestly positive EBITDA in 2019 and high adjusted leverage of over 5x in 2020, including our adjustment for Indivior's litigation reserve. We are also expecting a significant one-time cash flow deficit in 2019 during this transition year, including payments for legal settlements. We are affirming our 'B' issuer credit rating on Indivior PLC because of the company's sizable cash balance, which exceeds debt and legal reserves, but revising the outlook to negative. We are also affirming our 'B+' issue-level rating on Indivior's senior secured credit facility. The negative outlook reflects risk to our base-case expectations that SUBLOCADE (a once-a-month injectable treatment for opioid dependence) will grow sufficiently to m

IR-2019-32: IRS: Choose tax preparers carefully

Issue Number:    IR-2019-32 Inside This Issue IRS: Choose tax preparers carefully Tax return preparer fraud makes IRS' 2019 'Dirty Dozen' list of tax scams WASHINGTON — The Internal Revenue Service today included tax return preparer fraud on its "Dirty Dozen" list of common tax scams for 2019 and offered tips to help taxpayers avoid unscrupulous tax preparers. With the Tax Cuts and Jobs Act, the most sweeping tax reform legislation in more than 30 years now in effect, some taxpayers may choose to have a paid professional prepare their tax returns this year even if they've done it themselves in years past. The IRS reminds taxpayers to be careful when selecting a tax professional. Though most tax professionals provide honest, high-quality service, a minority of dishonest preparers operate each filing season perpetrating refund fraud, identity theft and other scams that hurt innocent taxpayers. "Tax professionals provide