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Showing posts from March 12, 2019

PT Delta Merlin Dunia Textile Assigned 'BB-' Rating With Stable Outlook; Notes Rated 'BB-'

We equalize the rating on PT Delta Merlin Dunia Textile (DMDT) with our view of the creditworthiness of Duniatex Group, reflecting the company's core subsidiary status. We assess DMDT's stand-alone credit profile as 'bb'. Duniatex Group's higher leverage than DMDT's and its high level of short-term working capital debt constrains its credit profile. Its strong operating performance and stable track record provides some support. We have assigned our 'BB-' long-term issuer credit rating to DMDT. We also assigned our 'BB-' long-term issue rating to the Indonesia-based textile weaving company's US$300 million senior unsecured notes. The stable outlook on DMDT reflects our expectation that Duniatex Group will maintain its market position in Indonesia's textile industry over the next 12 months. SINGAPORE (S&P Global Ratings) March 13, 2019--S&P Global Ratings today assigned its 'BB-' long-term issuer credit rati

FLAR Outlook Revised To Negative; 'AA/A-1+' Ratings Affirmed Under Revised Criteria

Following a review under our revised criteria for multilateral lending institutions, we are affirming our long- and short-term issuer credit ratings on Fondo Latinoamericano de Reservas (FLAR) at 'AA/A-1+' and removing them from under criteria observation (UCO). The increased credit risk from FLAR's exposure to Venezuela remains largely counterbalanced by its extremely strong financial risk profile. However, we are revising our outlook on FLAR to negative from stable. The negative outlook reflects our view that there is at least a one-in-three probability that Venezuela arrears will exceed 180 days over the next 24 months, which would trigger a deterioration in FLAR's enterprise risk profile and could lead to an up to two-notch downgrade. BUENOS AIRES (S&P Global Ratings) March 12, 2019--S&P Global Ratings today said it revised its outlook on Fondo Latinoamericano de Reservas (FLAR) to negative from stable. We also affirmed our 'AA' long

AFG 2019-1 Trust In Respect Of Series 2019-1 Prime RMBS Assigned Preliminary Ratings

MELBOURNE (S&P Global Ratings) March 13, 2019--S&P Global Ratings today assigned its preliminary ratings to seven of the eight classes of prime residential mortgage-backed securities (RMBS) to be issued by Perpetual Corporate Trust Ltd. as trustee for AFG 2019-1 Trust in respect of Series 2019-1 (see list). The preliminary ratings reflect: Our view of the credit risk of the underlying collateral portfolio, including our view that the credit support is sufficient to withstand the stresses we apply. The credit support for the rated notes comprises note subordination, excess spread and lenders' mortgage insurance (LMI) on 36.1% of the portfolio. Our expectation that the various mechanisms to support liquidity within the transaction, including a liquidity facility equal to 1.0% of the aggregate outstanding amount of the notes, subject to a floor of A$350,000, and the principal draw function are sufficient to ensure timely payment of interest. The extraordinary

Hengli Real Estate's Proposed Guaranteed U.S. Dollar Senior Unsecured Notes Assigned 'BBB-' Rating

HONG KONG (S&P Global Ratings) March 13, 2019--S&P Global Ratings today assigned its 'BBB-' long-term issue rating to Poly Real Estate Finance Ltd.'s proposed U.S.-dollar-denominated senior unsecured notes. Hengli (Hong Kong) Real Estate Ltd. (BBB-/Stable/--) guarantees the notes with Poly Development Holding Group Co. Ltd. (BBB/Stable/--) providing support via a keepwell agreement. Hengli is Poly Development's offshore financing platform. The issue rating is subject to our review of the final issuance documentation. We equalize the rating on the senior unsecured notes with the issuer credit rating on Hengli because we do not see any significant subordination risk in the company's capital structure. We estimate Hengli's priority debt ratio dropped by the end of 2018, compared with about 47% at the end of 2017, and further below our notching threshold of 50%. That is because Hengli made two senior unsecured notes issuances totaling US$1 billi

South Africa-Based Forest Products Group Sappi's Senior Unsecured Debt Rated 'BB'

JOHANNESBURG (S&P Global Ratings) March 13, 2019--S&P Global Ratings today assigned its 'BB' issue rating to the 3.125% €450 million senior unsecured notes, due 2026, issued by Sappi Papier Holding GmbH and guaranteed by South Africa-based pulp and paper manufacturer Sappi Ltd. The notes rank pari passu with all of the company's other unsecured, unsubordinated debt outstanding. As such, the recovery rating on the notes is '3', indicating our expectation of meaningful recovery (50%-70%; rounded estimate: 55%) in the event of a default. All of our other ratings on Sappi Ltd. and Sappi Papier Holdings GmbH remain unchanged. The company intends to use the proceeds from these notes to redeem its 3.375% €450 million callable senior secured notes due 2022. We expect the company to exercise its call option on these notes shortly after the issuance of the new notes due in 2026, and to redeem the 2022 notes after the expiration of the 30-day call-option n

Hannibal, MO Waterworks Revenue Bonds Assigned 'A-' Rating On Strong Enterprise And Financial Profiles

DES MOINES (S&P Global Ratings) March 12, 2019--S&P Global Ratings assigned its 'A-' rating to Hannibal, Mo.'s series 2019 waterworks revenue bonds. The outlook is stable. "The rating reflects our view of the city's combination of an adequate enterprise profile and strong financial risk profile," said S&P Global Ratings credit analyst John Schulz. The enterprise risk profile reflects our view of the water system's: Weak economic indicators, as evident with median household median income level at 74% of the national average combined with revenue concentration with their top customer; Very low industry risk as a monopolistic service provider of an essential public utility; Strong market score, based on an average residential bill as a percentage of median household effective buying income (MHHEBI), with average poverty rates; and Good operational management assessment (OMA). The financial risk profile reflects our view of the

Louisiana Local Government Environmental Facilities Community Development Authority 2015 Bond Rating Lowered To 'A+'

CENTENNIAL (S&P Global Ratings) March 12, 2019--S&P Global Ratings lowered its rating to 'A+' from 'AA-' on Louisiana Local Government Environmental Facilities Community Development Authority's series 2015 revenue bonds, issued for Ragin’ Cajun Facilities Corp. (Cajundome Project), based on the application of its "Priority-Lien Tax Revenue Debt" criteria, published Oct. 22, 2018. The outlook is stable. "The downgrade is due to our assessment of the volatility of hotel taxes, as well as a trend of declining hotel tax revenues over the past two years," said S&P Global Ratings credit analyst Alex Louie. While local economy metrics continue to show steady growth, hotel tax revenues continue to decrease. Officials believe that 2019 will show an improvement in pledged revenues compared to 2018, due to new hotel properties and an increase in average daily rate as well as occupancy. However, the gradual decline of pledged revenues

CWGS Enterprises LLC Downgraded To 'B+' On Decelerating RV Retail Sales; Outlook Negative

CWGS Enterprises LLC (Camping World) reported fourth-quarter and full-year 2018 operating results that were below our expectations. The RV industry is also experiencing excess inventory that is partly caused by a recent and forecast decline in retail RV sales. Therefore, we lowered our forecast for revenue and EBITDA and revised our forecast for adjusted debt to EBITDA to remain above 4x through 2020. We lowered the issuer credit rating on Camping World to 'B+' from 'BB-'. We also lowered the issue-level rating on the senior secured revolver and term loan two notches to 'BB-', based on the lowered issuer credit rating and a revision of the recovery rating on this debt to '2' from '1'. We revised the recovery rating because of an assumed reduction to emergence valuation of recently acquired assets. The negative outlook reflects our forecast for a decline in new RV sales in 2019, new unit price discounting, and uncertainty in the magn

International Wire Group Holdings Inc.'B' Rating Placed On CreditWatch Negative Following Expected Acquisition By Atlas

U.S.-based wire producer International Wire Group Holdings Inc. (IWG) has entered into a definitive merger agreement to be acquired by affiliates of private equity firm Altas Holding LLC. Atlas will acquire all outstanding shares of IWG common stock using cash. We are placing our 'B' rating on IWG and the 'B' issue rating on its senior secured debt on CreditWatch with negative implications. The CreditWatch negative placement indicates that we could either affirm or lower our ratings on IWG pending our assessment of the company's operations and capital structure pro forma for the transaction under the new ownership. NEW YORK (S&P Global Ratings) March 12, 2019—S&P Global Ratings today took the rating actions listed above. The CreditWatch placement follows the announcement that affiliates of Atlas Holdings LLC plan to acquire International Wire Group Holdings Inc. (IWG), a U.S.-based copper wire producer. Under the terms of the agreement, Atla

New Jersey Housing & Mortgage Finance Agency 1991-1 Bond Rating Affirmed At 'A+', Off CreditWatch; Outlook Stable

SAN FRANCISCO (S&P Global Ratings) March 12, 2019--S&P Global Ratings affirmed its 'A+' rating on New Jersey Housing & Mortgage Finance Agency's (Presidential Plaza at Newport project) series 1991-1 multifamily housing revenue refunding bonds, and removed the rating from CreditWatch with negative implications, where it had been placed on Dec. 12, 2018. The outlook is stable. The CreditWatch placement had been based on our receipt of a report that the trustee draws on the debt service reserve account or the liquidity subaccounts to meet debt service payments. "Following conversations with the trustee during the CreditWatch period, we have concluded that cash shortfall risks are mitigated by the project's seven-month debt service reserve fund, which includes an additional month of principal and interest reserve to take into account a 30-day lag," said S&P Global Ratings credit analyst Jose Cruz. "Furthermore, the project maintai

Lacey, WA GO Rating Raised To 'AAA' On General Fund Balance

SAN FRANCISCO (S&P Global Ratings) March 12, 2019--S&P Global Ratings raised its long-term rating to 'AAA' from 'AA+' on Lacey, Wash.'s previously issued limited-tax general obligation bonds. The outlook is stable. "The rating action reflects our view of the city's maintenance of a large available general fund balance inclusive of our adjustments and our view that the balance may be at a peak but is likely to remain above 75% of expenditures for the foreseeable future," said S&P Global Ratings credit analyst Chris Morgan. The stable outlook reflects our view that the city's economic performance is likely to lead to continued very strong budgetary performance and further improvement in economic indicators.

BrightSphere Investment Group plc Outlook Revised To Negative On Persistent Outflows And Potential For Higher Leverage

BrightSphere's assets under management (AUM) significantly declined in 2018 as a result of both net outflows (fourth consecutive year) and market depreciation. Leverage, on the other hand, was comfortably below 2.0x, mostly as a result of holding a larger cash balance (which we net against debt) than we originally anticipated. We are revising our outlook on BrightSphere to negative from stable and affirming our 'BBB-' issuer and issue-level ratings. The negative outlook reflects our expectation that organic growth will remain muted while net leverage rises, potentially above 2.0x, as a result of pressure in cash flow generation and a lower cash balance. WASHINGTON D.C. (S&P Global Ratings) March 12, 2019-- S&P Global Ratings said today it revised its outlook on BrightSphere Investment Group plc to negative from stable. At the same time, we affirmed our 'BBB-' issuer credit and senior unsecured debt ratings. BrightSphere's strategic dire

NVIDIA Corp. Liquidity Assessment Revised To Adequate From Exceptional; Ratings And Outlook Affirmed

NVIDIA Corp. has announced an agreement to acquire Mellanox, a semiconductor firm focused on interconnect and data transfer technology, in a $6.9 billion all-cash transaction. We expect this transaction, which the firm expects to close by the end of fiscal 2020, will lower cash balances to approximately $1.5 billion, including the impact of the firm's $2.3 billion shareholder return plan. We are revising our liquidity assessment on NVIDIA to adequate from exceptional, reflecting significantly lower cash balances. At the same time, we are affirming all ratings on the firm, including our 'BBB+' issuer credit rating, based on our view that S&P Global Ratings-adjusted leverage will remain below 0.5x and that the contribution of Mellanox will accelerate the firm's increasing end-market diversity. The positive outlook reflects S&P Global Ratings' view that NVIDIA's sustainable competitive advantages and leading positions in rapidly growing end

Bloomin' Brands Inc. Outlook Revised To Stable From Negative On Improving Performance; Ratings Affirmed

S&P Global Ratings expects U.S.-based Bloomin' Brands Inc. will maintain positive operating trends at its core Outback Steakhouse concept (about 60% of total revenue) while stabilizing its Brazil operations, resulting in overall sales growth in the next 12 to 18 months. We are revising our outlook on Bloomin' to stable from negative. At the same time, we are affirming all ratings, including the 'BB' issuer credit rating. The stable outlook reflects our expectation that sales and margin will modestly improve in 2019, supporting moderate free cash flow generation and stable credit metrics. NEW YORK (S&P Global Ratings) March 12, 2019--S&P Global Ratings today took the rating actions listed above. We expect continued revenue growth in 2019 driven by positive same-store sales at the core Outback Steakhouse, while operations in Brazil (about 10% of sales) continue to stabilize. The company's focus on store remodeling, relocations, and ongoing

Guidehouse LLP Ratings Affirmed, Outlook Revised To Negative On Lower-Than-Expected Earnings

Since separating from its former parent company, Guidehouse LLP's revenues and earnings have been lower than expected, resulting in credit ratios worse than we had previously forecast. However, we expect ratios to improve over the next 6-12 months. On March 12, 2019, we affirmed our 'B' issuer credit rating on Guidehouse LLP and revised the outlook to negative from stable. At the same time we affirmed our 'B' issue-level rating on the company's first lien-debt facility including the $315 million term loan ($313 million outstanding) and $50 million revolver. The '3' recovery rating is unchanged. We also affirmed our 'CCC+' issue-level rating on the company's $105 million second-lien term loan. The '6' recovery rating is unchanged. The negative outlook reflects our expectation that debt to EBITDA will remain above 7x in 2019 because of operational difficulties before improving in 2020. NEW YORK (S&P Global Ratings

CEMEX S.A.B. de C.V.'s Proposed EUR400 Million Senior Secured Notes Due 2026 Rated 'BB'

MEXICO CITY (S&P Global Ratings) March 12, 2019--S&P Global Ratings assigned its 'BB' issue-level rating and recovery rating of '3' to CEMEX S.A.B. de C.V.'s (global scale: BB/Stable/--; national scale: mxA/Stable/mxA-1) €400 million 3.125% senior secured notes due 2026. The recovery rating of '3' indicates that bondholders can expect a meaningful (50%-70%) recovery in the event of a payment default. CEMEX intends to use the net proceeds for general corporate purposes, including repaying other debt, all in accordance with the 2017 Credit Agreement. The notes will be secured by a first-priority security interest over all the shares of CEMEX México, S.A. de C.V., Cemex Operaciones México, S.A. de C.V., CEMEX TRADEMARKS HOLDING Ltd., New Sunward Holding B.V., and CEMEX España, S.A. (together, the collateral) and all proceeds of such collateral. CEMEX's main subsidiaries will unconditionally guarantee the notes, under the same terms as

Province of Neuquen 'B' Ratings Affirmed, Outlook Remains Stable

The dynamic oil and gas sector should bolster Neuquen's operating revenues and more than compensate for its high spending, which we expect to grow above inflation, resulting in solid operating surpluses. However, the Argentine province will continue to face challenges in implementing formal medium- and long-term financial policies. We're affirming our 'B' long-term global scale foreign and local currency issuer credit ratings on the province of Neuquén. We're also affirming the 'B' issue-level ratings on its rated secured and unsecured notes. The outlook is stable, reflecting our view that Neuquen will continue attracting investments in the hydrocarbon sector, and the local economy should grow faster than national GDP, resulting in operating surpluses and a lower debt. RATING ACTION BUENOS AIRES (S&P Global Ratings) March 12, 2019--S&P Global Ratings affirmed its 'B' global scale foreign and local currency ratings on Neuquen.

Realogy Group LLC Outlook Revised To Negative On Weak U.S. Housing Market And High Leverage; Ratings Affirmed.

A sharp decrease in home sales volume and rising costs compounded with levered share buybacks in 2018 has resulted in weaker-than-expected operating performance for Madison, N.J.-based residential real estate brokerage provider Realogy Group LLC. Accordingly, we are revising our outlook to negative from stable and affirming all ratings, including the 'BB-' issuer credit rating. The negative outlook reflects the risk that the U.S. residential housing market does not improve leading to Realogy's inability to stem the pace of revenue declines during the peak housing season, unexpected increases in costs, and preference for share buybacks over debt repayment, ultimately resulting in leverage sustained above 5x. NEW YORK (S&P Global Ratings) March 12, 2019--S&P Global Ratings today took the rating actions listed above. The negative outlook on Realogy Group LLC reflects our expectation that S&P Global Ratings' adjusted debt leverage will temporari

Dell International LLC's $3.6 Billion Term Loan A-6 Due March 2024 Rated 'BBB-' (Recovery Rating: '2')

NEW YORK (S&P Global Ratings) March 12, 2019--S&P Global Ratings today assigned its 'BBB-' issue-level rating and '2' recovery rating to Round Rock, Texas-based Dell International LLC's $3.6 billion term loan A-6 due March 2024 (EMC Corp. is the co-borrower). The '2' recovery rating indicates our expectation for substantial (70%-90%; rounded estimate: 75%) recovery in the event of a payment default. Dell International LLC and EMC Corp. are wholly owned subsidiaries of Dell Technologies Inc., a global information technology (IT) solutions provider. The company will use the proceeds from the proposed term loan to partially refinance its existing term loan A-2. Pro forma for the transaction, the outstanding balance on the company's term loan A-2 will be about $1.3 billion. All of our other ratings on Dell Technologies Inc. remain unchanged, including our 'BB+' issuer credit rating. We rate the new term loan A-6 one notch above o

Euronet Worldwide Inc.'s Proposed Senior Unsecured Convertible Debt Rated 'BBB-'

NEW YORK (S&P Global Ratings) March 12, 2019--S&P Global Ratings today assigned its 'BBB-' debt issue rating on Euronet Worldwide Inc.'s (EEFT) proposed $500 million senior unsecured convertible notes due March 15, 2049. Euronet disclosed that it may use the proceeds to repurchase up to $100 million of stock and intends to apply the remainder of the proceeds for general corporate purposes which may include redeeming its existing $401.5 million 1.5% senior unsecured convertible notes due Oct. 1, 2044. The new notes are expected to have terms similar to the existing notes, but with a higher conversion strike price because Euronet is trading well above the $72.18 per share strike price on the existing notes. The holders of the new convertible notes will have the option to convert the notes in March 2025 (or earlier if certain market conditions are met). As of December 2018, Euronet had slightly more than $910 million in gross debt from which we deduct $200

Granite Shoals, TX, GO Debt Rating Raised To 'AA-' From 'A' On Improved Economic And Financial Profile

DALLAS (S&P Global Ratings) March 12, 2019--S&P Global Ratings raised its rating on Granite Shoals, Texas' general obligation (GO) debt two notches to 'AA-' from 'A'. At the same time, S&P Global Ratings removed the rating from CreditWatch with developing implications, where it was placed Dec. 18, 2018. The outlook is stable. "The upgrade is based on the improvement in Granite Shoals' economic profile from weak to adequate in addition to improvement in the city's budgetary flexibility to a relatively low fund balance of $810,000 or very strong 28% of expenditures in fiscal 2017 from a nominally low $232,000 or a strong 7% in fiscal 2016," said S&P Global Ratings credit analyst Jennifer Garza. S&P Global Ratings placed the rating on CreditWatch developing because the city only partially supplied the information S&P Global Ratings requested. We have removed the CreditWatch placement and assigned a stable outlook b