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Showing posts from March 11, 2019

FNAC Darty SA Upgraded To 'BB+' On Improving Profitability And Credit Metrics; Outlook Stable

French consumer electronics retailer FNAC Darty SA (Fnac)'s profitability and credit metrics exceeded our expectations, indicating stronger creditworthiness, thanks to the group's product and service initiatives and prudent financial policy. We forecast that earnings and profitability will keep rising, but slower than in recent quarters, as low like-for-like growth due to fierce competition balances new store openings and small bolt-on acquisitions; we also anticipate solid cash flows and a healthy balance sheet, notwithstanding shareholder payouts. We are therefore raising to 'BB+' from 'BB' our long-term issuer credit rating on Fnac and our issue rating on the group's senior unsecured debt. The stable outlook reflects our expectation that robust free operating cash flow generation of about €140 million should support a modest improvement in credit metrics, with EBITDAR coverage rising to 2.6x from 2.4x in fiscal year ending Dec. 31, 2018, de

Orano Outlook Revised To Negative From Stable On Weaker Adjusted Leverage Forecast; 'BB+' Rating Affirmed

On March 1, 2019, France-based nuclear services group Orano published weak results for the rating in 2018, with an anticipated decline in EBITDA and an increase in its asset retirement obligation (ARO) liabilities. While we continue to view the company's ability to generate positive free cash flow in 2018 and in the coming years as a key consideration for the current rating, the volatile nature of the nuclear liabilities may hinder its ability to deleverage. Consequently, we revised our outlook to negative from stable and affirmed our 'BB+' issuer credit rating on Orano. The negative outlook reflects the possibility we could lower the rating by one notch over the coming 12-24 months if the company cannot demonstrate clear deleveraging, with adjusted debt to EBITDA of 5.5x by 2020. PARIS (S&P Global Ratings) March 11, 2019—S&P Global Ratings today took the rating actions listed above. The outlook revision reflects the possibility we could lower the

Navarro Independent School District, TX Series 2019 Unlimited Tax Refunding Bonds Rated 'AA-'

NEW YORK (S&P Global Ratings) March 11, 2019--S&P Global Ratings assigned its 'AAA' enhanced program rating and 'AA-' underlying rating to Navarro Independent School District (ISD), Texas' series 2019 unlimited-tax refunding bonds. At the same time, S&P Global Ratings affirmed its 'AA-' underlying rating on the district's existing general obligation (GO) debt. The outlook on all ratings is stable. The 'AA-' underlying rating reflects the district's track record of surpluses over the past five years as a result of its growing economy. Despite the removal of a large number of oil rigs, the district continues to benefit from its proximity to San Antonio, and, as a result, assessed values (AV) are trending upward and are in line with population growth. However, the district's sizable debt and somewhat concentrated tax base remains a constraining factor. "The 'AAA' enhanced program rating reflects our vi

United Parcel Service Inc. Outlook Revised To Negative; Ratings Affirmed

Atlanta-based United Parcel Service Inc.'s (UPS') 2018 credit measures were weaker than expected, in part because of its increased pension liabilities, and we now assume credit measures will improve more gradually over the next few years. We affirmed our 'A+' issuer credit rating on UPS and revised the outlook to negative from stable. At the same time, we affirmed our 'A+' issue-level ratings on UPS' senior unsecured debt. The revised outlook reflects that despite expected continued revenue and earnings growth, the company's pension obligations will continue to weigh on credit measures, with funds from operations (FFO) to adjusted debt in the low-30% area in 2019. NEW YORK (S&P Global Ratings) March 11, 2019—S&P Global Ratings today took the rating actions listed above. The outlook revision to negative reflects our view that it will likely take longer than previously expected for UPS' FFO-to-debt ratio to improve to the mid-

Lincoln, NE COP, GO Ratings Raised To 'AAA' On The Application Of Our Criteria

CHICAGO (S&P Global Ratings) March 11, 2019--S&P Global Ratings raised its rating to 'AAA' from 'AA+' on Lincoln, Neb.'s series 2012 certificates of participation (COPs) and Lincoln-Lancaster County Public Building Commission's (PBC) general obligation (GO) limited tax debt, which is supported by both the city and Lancaster County. In addition, S&P Global Ratings affirmed its: 'AAA' rating on Lancaster County Correctional Facility Joint Public Agency's (JPA) limited tax GO debt, which is supported by both the city of Lincoln and Lancaster County; 'AAA' rating on Lincoln's series 2013 limited tax GO arena debt; and 'AA+' rating on Lincoln's solid waste management revenue bonds. The outlook on all ratings is stable. "The raised ratings and affirmations reflect the application of our criteria, 'Issue Credit Ratings Linked To U.S. Public Finance Obligors' Creditworthiness' , published J

Wachovia Bank Commercial Mortgage Trust Series 2007-C33 Ratings On Three Classes Lowered; Four Discontinued

We lowered our ratings on three classes from Wachovia Bank Commercial Mortgage Trust's series 2007-C33, a U.S. CMBS transaction. In addition, we discontinued our 'D (sf)' ratings on four classes from the same transaction. 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 11, 2019--S&P Global Ratings today lowered its ratings on three classes of commercial mortgage pass-through certificates from Wachovia Bank Commercial Mortgage Trust's series 2007-C33, a U.S. commercial mortgage-backed securities (CMBS) transaction. In addition, we discontinued our 'D (sf)' ratings on four other classes from the same transaction (see list). The downgrades reflect credit support erosion that we anticipate will occur upon the eventual

CTI Foods Holding Co. LLC Rating Lowered To 'D' From 'CCC-' On Bankruptcy Filing; Debt Ratings Lowered

CTI Foods Holding Co. LLC has filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. S&P Global Ratings is lowering the issuer credit rating on CTI to 'D' from 'CCC-'. We also are lowering our rating on the company's $370 million first-lien term loan due in 2020 to 'D' from 'CCC-'. The recovery rating remains '3', indicating our expectations for meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a payment default. Concurrently, we are lowering our issue-level rating on the company's $140 million second-lien term loan due in 2021 to 'D' from 'C'. The recovery rating remains '6', indicating our expectations for negligible (0%-10%; rounded estimate: 0%) recovery in the event of a payment default. NEW YORK (S&P Global Ratings) March 11, 2019—S&P Global Ratings today took the rating actions listed above. The downgrade follows CTI's a

New York State's 2019A GO Tax-Exempt Bonds Rated 'AA+'; Other Ratings Affirmed

CHICAGO (S&P Global Ratings) March 11, 2019--S&P Global Ratings assigned its 'AA+' rating and stable outlook to New York State's general obligation (GO) series 2019A tax-exempt bonds (approximately $116 million). At the same time, S&P Global Ratings affirmed its 'AA+' rating on the state's GO debt outstanding and its 'AA' rating on the state's appropriation debt. The outlook is stable. In addition, S&P Global Ratings affirmed its 'AAA/A-1+' and 'AA+/A-1+' joint support ratings and its 'AA/A-1' dual ratings on issuances where the short-term ratings are based on the liquidity support from various financial institutions. The GO rating reflects what we view as New York State's: Strong and diverse economy; Strong financial management; Prudent use, in our opinion, of the significant monetary settlements from various financial institutions; Stable budget and financial trends; and Well managed and

Cold Spring Harbor Laboratory, NY 1999 Revenue Bond Rating Raised To 'AA' On Operating Surpluses And Resources

NEW YORK (S&P Global Ratings) March 11, 2019--S&P Global Ratings raised its long-term rating on Nassau County Industrial Development Agency, N.Y.'s series 1999 civic facilities revenue bonds, issued for Cold Spring Harbor Laboratory (CSHL, or the laboratory) to 'AA' from 'AA-'. We also affirmed the 'A-1+' short-term component of the rating on the series 1999 bonds, based on a liquidity facility from TD Bank N.A. The outlook is stable. "The upgrade reflects our opinion of the laboratory's maintenance of healthy operating surpluses, as well as available resources ratios we consider consistent with the current rating," said S&P Global Ratings credit analyst Charlene Butterfield. In addition, the rating reflects CSHL's relatively diverse revenue profile for a research institute, and strong fundraising history. In our view, outstanding debt is manageable given the organization's healthy endowment and liquidity and bec

Ares XXXIX CLO Ltd./Ares XXXIX CLO LLC Notes Assigned Preliminary Ratings

Ares XXXIX CLO Ltd./Ares XXXIX CLO LLC'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-R, A-1-R, B-R, C-R, and D-R 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) March 11, 2019--S&P Global Ratings today assigned its preliminary ratings to Ares XXXIX CLO Ltd./Ares XXXIX CLO LLC's floating-rate notes (see list). This is a proposed refinancing and extension of the Ares XXXIX CLO transaction, which S&P Global Ratings did not originally rate The note issuance is collateralized loan obligation (CLO) securitization backed by primarily broadly syndicated speculative-grade (rated 'BB+' and lower) senior secured term loans that are governe

Bunker Hill Loan Depository Trust 2019-1 Notes Assigned Preliminary Ratings 11-Mar-2019 16:52 EDT View Analyst Contact Information

Bunker Hill Loan Depository Trust 2019-1's note issuance is an RMBS transaction backed by primarily non-qualified mortgage loans. The preliminary ratings reflect our view of the transaction's collateral characteristics, credit enhancement structure, and representation and warranty, among other factors. NEW YORK (S&P Global Ratings) March 11, 2019--S&P Global Ratings today assigned its preliminary ratings to Bunker Hill Loan Depository Trust 2019-1's (BHLD 2019-1's) mortgage-backed notes (see list). The note issuance is a residential mortgage-backed securities (RMBS) transaction backed by first-lien, fixed- and adjustable-rate, and interest-only 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 611 loans, which are primarily non-qualified mortgage loans. The preliminary ratings are based on collateral and st

Jourdanton ISD, TX GO Rating Outlook Revised To Stable From Negative On Structural Balance Return, Very Strong Reserves

DALLAS (S&P Global Ratings) March 11, 2019--S&P Global Ratings revised the outlook on its 'A+' underlying rating for credit program on Jourdanton Independent School District (ISD), Texas' general obligation (GO) debt to stable from negative and affirmed the rating. The outlook revision reflects S&P Global Ratings' opinion of the district's return to structural balance and maintenance of very strong available reserves following a period of property tax base declines, as well as taxable value stabilization following years of contraction due to lower oil prices. "We do not expect to change the rating within the outlook period. However, assuming all other rating factors remain stable or improve, we could lower the rating if the tax base were to decrease materially, leading to reduced available reserves to levels we consider strong or lower, or if tax base concentration or debt were to increase materially to levels we no longer think very

Los Angeles Unified School District, CA GO Bond Rating Lowered To 'A+', Lease Revenue Bond Rating Lowered To 'A'

SAN FRANCISCO (S&P Global Ratings) March 11, 2019--S&P Global Ratings lowered its long-term and underlying rating (SPUR) to 'A+' from 'AA-' on Los Angeles Unified School District, Calif.'s outstanding general obligation (GO) bonds and lowered its rating to 'A' from 'A+' on the district's existing lease revenue bonds. The outlook is negative. "The rating action reflects the district's structural imbalance, long-term trend of declining enrollment, and sizeable unfunded other postemployment benefits liability," said S&P Global Ratings credit analyst Dan Kaplan. "With projected revenue declines and expenditure increases related to a recent labor agreement, the district expects to finish fiscal 2019 with a 1.7% deficit, which is projected to grow to a 7.1% deficit by fiscal 2020. The district struggles with declining enrollment, which is the primary driver of state revenue. Driven by both demographic changes

Spain-Based Enagas Downgraded To 'BBB+' On Minority Stake Purchase Of Tallgrass Energy; Outlook Stable

Spanish gas transmission company Enagas S.A. has announced its intention to purchase a stake of about 30% in a newly created investment vehicle that will control 44% of Tallgrass Energy, for a total of about $673 million. In our view, although this investment will weaken Enagas' business risk profile, we continue to assess it as excellent, and expect the company's S&P Global Ratings-adjusted funds from operations (FFO) to debt will decline to about 14.0% in 2019, from about 16.5% in 2018. We are therefore downgrading Enagas and its subsidiary Enagas Transporte S.A.U. to 'BBB+' from 'A-'. The stable outlook reflects our view of management's commitment to restore S&P Global Ratings-adjusted FFO to debt to above 15% from 2021, with any additional investments offset by significant credit remedy measures. PARIS (S&P Global Ratings) March 11, 2019—S&P Global Ratings today took the rating actions listed above. The downgrade reflec

BBVA Banco Continental Outlook Revised To Stable From Negative On Improved Capital Metrics, 'BBB+/A-2' Ratings Affirmed

We're revising our outlook on Peru-based BBVA Banco Continental to stable from negative and revising upwards the bank's stand-alone credit profile to 'bbb+' from 'bbb' due to the improved capitalization metrics. At the same time, we're raising our rating on the bank's $300 million subordinated notes due 2029 to 'BBB' from 'BBB-'. We still have a negative outlook on the bank's parent, Banco Bilbao Vizcaya Argentaria, S.A. (BBVA). However, its downgrade by one notch could no longer trigger a downgrade of the Peruvian subsidiary. We consider BBVA Banco Continental as a strategically important subsidiary of BBVA, but the Peruvian bank no longer receives a notch of group support because its SACP has strengthened. BUENOS AIRES (S&P Global Ratings) March 11, 2019--S&P Global Ratings revised its outlook on BBVA Banco Continental to stable from negative following an improvement in its capitalization metrics. We also aff

SBP Holding L.P. Outlook Revised To Stable, Ratings Affirmed On Improved Liquidity And Following Acquisitions

U.S. based SBP Holdings, a distributor group of industrial rubber, wire rope, and rigging products and a participant in fluid power industries, has experienced operational growth through acquisitions, which has stabilized its market position and strengthened its liquidity and financial performance. We affirmed our 'CCC+' issuer credit rating on SBP Holdings, as well as the 'CCC+' rating on its senior secured first-lien debt and 'CCC-' rating on its second-lien debt. We also revised the outlook to stable from negative. The stable outlook reflects our view that SBP will maintain adequate liquidity and improved financial performance over the next 12 months, as well as proactively address its upcoming 2021 debt maturities in a timely manner. CENTENNIAL (S&P Global Ratings) March 11, 2019—S&P Global Ratings today took the rating actions listed above. The outlook revision follows SBP Holding L.P.' s improved liquidity and financial measur

Sunoco L.P.'s Proposed Notes Rated 'BB-' (Recovery Rating: '3')

U.S. midstream energy partnership Sunoco L.P. announced a private offering of senior unsecured notes due 2027. Sunoco Finance Corp., a wholly owned subsidiary, is a co-issuer of he notes. Sunoco intends to use the net proceeds from this offering to repay a portion of outstanding borrowings under its $1.5 billion revolving credit facility. We are assigning our 'BB-' issue-level rating to the proposed notes. The '3' recovery rating indicates our expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a payment default. Our 'BB-' issue-level rating and '3' recovery rating on the partnership's existing senior unsecured notes is unchanged. The stable outlook reflects our belief that Sunoco's leverage will generally be at the lower end of its 4.5x-4.75x guidance range and distribution coverage will be in the 1.3x area. We also expect Sunoco will continue to implement its strategy to expand it fuel distributio

Northview Public Schools, MI GO Debt Rating Outlook Revised To Negative On Weaker Finances, Persistent Deficits

NEW YORK (S&P Global Ratings) March 11, 2019--S&P Global Ratings revised the outlook on its 'A+' underlying rating for credit program on Northview Public Schools, Mich.'s unlimited-tax general obligation (GO) debt to negative from stable and affirmed the rating. The outlook revision reflects S&P Global Ratings' opinion of the district's four consecutive deficits that significantly decreased available reserves to 7.7% of expenditures in fiscal 2018 from 13.6% in fiscal 2014, coupled with the possibility of reserves decreasing during the next couple of fiscal years, which could result in our lowering the rating. "We believe there is at least a one-in-three chance the district's recent actions to restore structural balance and return available reserves to stronger levels during the outlook's two-year period might not succeed," said S&P Global Ratings credit analyst Michael Mooney. "If the district cannot return to st

SEC Share Class Initiative Returning More Than $125 Million to Investors

The Securities and Exchange Commission today announced settled charges against 79 investment advisers who will return more than $125 million to clients, with a substantial majority of the funds going to retail investors.  The actions stem from the SEC’s Share Class Selection Disclosure Initiative , which the SEC’s Division of Enforcement announced in February 2018 in an effort to identify and promptly correct ongoing harm in the sale of mutual fund shares by investment advisers.  The initiative incentivized investment advisers to self-report violations of the Advisers Act resulting from undisclosed conflicts of interest, promptly compensate investors, and review and correct fee disclosures.  The orders issued today address advisers who directly or indirectly received 12b-1 fees for investments selected for their clients without adequate disclosure, including disclosures that were inconsistent with the advisers’ actual practices. The SEC’s orders found that the investment advisers fail

Renton, WA GO Rating Raised To 'AAA' On Strong Reserves

SAN FRANCISCO (S&P Global Ratings) March 11, 2019--S&P Global Ratings raised its long-term rating to 'AAA' from 'AA+' on Renton, Wash.'s previously issued limited-tax general obligation bonds. At the same time, S&P Global Ratings assigned its 'AAA' long-term rating to the city's series 2019 limited-tax GO bonds. The outlook is stable. "The rating action reflects our view of the city's use of strong tax revenue growth to strengthen reserves over time and a demonstrated willingness to find structural solutions to budgetary challenges," said S&P Global Ratings credit analyst Chris Morgan. The stable outlook reflects our view that the city will continue to experience strong revenue growth consistent with strong economic momentum in the region and that the gross receipts tax will offset the absence of the state sales tax subsidy that expired in 2018.

Tank Holding Corp. 'B' Rating Affirmed On Proposed Sale To Olympus; New Debt Rated; Outlook Stable

U.S.-based storage tank manufacturer Tank Holding Corp. plans to issue new debt to finance its acquisition by private equity sponsor Olympus Partners. Although this transaction increases debt to EBITDA to about 7x on an S&P Global Ratings-adjusted basis as of Sept. 30, 2018, we forecast the company will reduce leverage to around 6.5x over the next 12 months. Therefore, we affirmed our 'B' issuer credit rating on Tank. In addition, we assigned our 'B' issue-level rating and '3' recovery rating to the company's proposed first-lien credit facilities, indicating our expectation of 50%-70% recovery (rounded estimate 55%) in the event of a payment default. The stable outlook reflects our expectation that revenue growth and EBITDA margin expansion will allow the company to generate good free cash flow and reduce debt to EBITDA to the 6.5x area over the next 12 months. CENTENNIAL (S&P Global Ratings) March 11, 2019—S&P Global Ratings tod