Skip to main content

Posts

Showing posts from March 18, 2019

Zhejiang Geely Holding Group Co. Ltd. Assigned 'BBB-' Rating; Outlook Stable

We expect Zhejiang Geely Holding Group Co. Ltd. to continue to gain market share, supported by good product design, improving quality, and a strong pipeline of new models at its subsidiaries. This is despite uncertainties in global auto demand. In our view, the China-based automaker will maintain modest leverage, thanks to its stable profitability and strong operating cash flows. On March 19, 2019, S&P Global Ratings assigned its 'BBB-' long-term issuer credit rating to Zhejiang Geely Holding. The stable outlook reflects our view that Zhejiang Geely Holding will continue to gradually grow its auto revenue and profit, and sustain moderate leverage over the next 12-24 months, despite a competitive and volatile market. HONG KONG (S&P Global Ratings) March 19, 2019--The rating on Zhejiang Geely Holding reflects our expectation that the company will continue to strengthen its position in the global and China's automotive industry over the next 12-24 mon

IGM Financial Inc.'s Proposed Senior Unsecured Debentures Rated 'A'

WASHINGTON D.C. (S&P Global Ratings) March 18, 2019--S&P Global Ratings today assigned its 'A' issue rating to IGM Financial Inc.'s proposed issuance of C$250 million in senior unsecured debentures due in 2050. The long-term issuer credit rating on IGM is 'A', and the outlook is stable. We anticipate that management will use the majority of the proceeds to pay down the existing C$150 million preferred shares and use the remaining balance for other general corporate purposes. We expect that, despite a modest increase in leverage, IGM will operate with debt to adjusted EBITDA close to or slightly above 1.5x during the next 12-24 months, comfortably below our 2.0x downside trigger.

Cook County School District No.157 (Hoover-Schrum), IL GO Bond Outlook Revised To Stable From Negative, Rating Affirmed

CHICAGO (S&P Global Ratings) March 18, 2019--S&P Global Ratings revised its outlook from stable from negative and affirmed its 'A' rating on Cook County School District No. 157 (Hoover-Schrum), Ill.'s outstanding general obligation (GO) bonds. "The stable outlook reflects our view of the district's stabilied financial prospects as shown by positive operating results in 2018, its increased funding under the new evidence-based formula, and a breakeven budget for 2019," said S&P Global Ratings credit analyst Helen Samuelson. The rating reflects our opinion of the district's: Participation in the deep and diverse Chicago metropolitan area economy; Strong reserves, on a cash basis of accounting; and Stabilized finances following increased revenue under the evidence-based formula and helped by management's budget controls, as exemplified by positive budget variances. Partly offsetting these strengths, in our view, are the distr

361 Degrees Downgraded To 'BB-' On Weakening Market Position And Cash Flow; Outlook Negative

361 Degrees International Ltd.'s competitive position and operating cash flow have weakened due to intensifying competition in China's sportswear industry. We expect the company's debt-to-EBITDA ratio to stay at 3.8x-4.0x over the next 12 months, materially higher than its debt leverage of 2.9x in 2017. On March 19, 2019, S&P Global Ratings lowered its long-term issuer credit rating on 361 Degrees to 'BB-' from 'BB'. At the same time, we lowered our long-term issue rating on the company's senior unsecured notes to 'BB-' from 'BB'. The negative outlook reflects our expectation that 361 Degrees' operating cash flow and debt leverage could further deteriorate owing to a weakening competitive position over the next 12 months. HONG KONG (S&P Global Ratings) March 19, 2019--S&P Global Ratings today took the rating actions listed above. We lowered the rating on 361 Degrees because we believe the company will co

TriNet Group Inc. Upgraded To 'BB' On Better Performance And Leverage; Outlook Stable; Debt Ratings Raised

Dublin, Calif.-based human resources (HR) service provider TriNet Group Inc. continues to perform better than expected as a result of the stabilization in total worksite employee (WSE) base, favorable pricing trends, and good cost management. The recent performance and platform migration resulted in an improvement in debt leverage to 1.9x at year-end 2018 from 2.1x in the previous year, and the company has remediated the financial control weakness identified in its 2016 and 2017 financial audits. As a result, we raised our issuer credit rating on TriNet to 'BB' from 'BB-'. The outlook is stable. At the same time, we raised our issue-level ratings on the company's senior secured credit facility to 'BBB-' from 'BB+'; the recovery rating on this debt remains '1'. The stable outlook reflects our expectation that TriNet will maintain its leverage ratio below 2.5x over the next year while continuing growth in total WSEs. NEW YORK

Supranational Institution The EU 'AA/A-1+' Ratings Affirmed On Revised Criteria; Outlook Stable

S&P Global Ratings now rates the EU under our revised criteria for multilateral lending institutions. We are affirming our 'AA/A-1+' ratings on the EU and removing them from under criteria observation. The outlook remains stable, reflecting our view that the rounded-average GDP-weighted rating on the EU's net budgetary contributors will stabilize at the current 'AA' level for the next two years. STOCKHOLM (S&P Global Ratings) March 18, 2019--S&P Global Ratings today said it affirmed its 'AA/A-1+' long- and short-term issuer credit ratings on supranational institution the EU. The outlook remains stable. We also affirmed our 'AA' long-term issue rating on the EU's senior unsecured debt. At the same time, we removed the ratings from under criteria observation (UCO) where we placed them on Dec. 14, 2018, after publishing our revised criteria for rating multilateral lending institutions (MLIs; see "Ratings On 32 Mul

Restaurant Brands International Inc. Upgraded To 'BB-' On Performance Improvement; Outlook Positive

S&P Global Ratings expects Toronto based quick-service restaurant company Restaurant Brands International Inc. (RBI) to maintain positive operating trends, following good performance in 2018 at its legacy brands Burger King and Tim Hortons, as well as at Popeyes, which was acquired in 2017. We are raising our issuer credit rating on Restaurant Brands International Inc. to 'BB-' from 'B+' and revising the outlook to positive from stable. At the same time, we are raising our issue-level ratings on the company's first-lien debt to 'BB-' from 'B' and on the company's second-lien notes to 'B' from 'B-'. The '3' and '6' recovery ratings, respectively, remain unchanged. The positive outlook reflects a potential upgrade in the next 12 months if the company further integrates Popeyes, successfully executes key initiatives, and sustains top-line and comparable sales growth for all three brands while mainta

Starwood Mortgage Residential Trust 2019-IMC1 Notes Assigned Preliminary Ratings

Starwood Mortgage Residential Trust 2019-IMC1's issuance is an RMBS transaction backed by first-lien, fixed- and adjustable-rate, fully amortizing residential mortgage loans (some with interest-only periods) secured by single-family residential properties, planned-unit developments, condominiums, and two- to four-family residential properties to both prime and nonprime borrowers. The loans are primarily nonqualified mortgage loans. We assigned our preliminary ratings to the class A-1, A-2, A-3, M-1, B-1, and B-2 notes. The preliminary ratings reflect our view of the transaction's credit enhancement, associated structural mechanics, representation and warranty framework, and the pool's collateral composition, among other factors. NEW YORK (S&P Global Ratings) March 18, 2019--S&P Global Ratings today assigned its preliminary ratings to Starwood Mortgage Residential Trust 2019-IMC1's mortgage pass-through certificates (see list). The note issuan

European Atomic Energy Community 'AA/A-1+' Ratings Affirmed After Similar Action On European Union; Outlook Stable

We have affirmed our 'AA/A-1+' ratings on the European Union (EU) and removed them from under criteria observation (UCO). We view the European Atomic Energy Community (EURATOM) as a core entity of the EU that is closely integrated through their common budget and debt issuance program. We are therefore affirming our 'AA/A-1+' long- and short-term ratings on EURATOM and removing them from UCO. The stable outlook reflects that on the EU. STOCKHOLM (S&P Global Ratings) March 18, 2019--S&P Global Ratings said today it affirmed its 'AA/A-1+' long- and short-term issuer credit ratings on the European Atomic Energy Community (EURATOM). The outlook is stable. We also affirmed our 'AA' long-term issue rating on EURATOM's senior unsecured debt. At the same time, we removed the ratings from UCO, where we placed them on Dec. 14, 2018, along with those of its parent the EU, after we published our revised criteria for rating multilateral

Legacy Reserves L.P. Downgraded To 'CCC-' As Company Seeks Strategic Alternatives; Outlook Negative

Legacy Reserves L.P., a Midland, Texas-based oil and gas exploration and production (E&P) company, has not yet secured an extension to its $1.5 billion revolving credit facility (with a borrowing base of $575 million and $529 million drawn as of Sept. 30, 2019) that matures on April 1, 2019, creating a potential near-term liquidity crisis. The company announced it has hired outside advisers to assist in reviewing strategic alternatives, as it also faces significant debt maturities in 2020 and 2021. As a result, we are lowering our issuer credit rating on Legacy Reserves to 'CCC-' from 'CCC'. At the same time, we are lowering our issue-level rating on the company's senior unsecured notes due in 2020 and senior unsecured notes due in 2021 to 'C' from 'CC' with a '6' recovery rating. We are also lowering our issue-level rating on the company's secured second-lien term loan to 'CCC-' from 'CCC' with a '3

Lifetime Brands Inc. Downgraded To 'B' On Weaker-Than-Expected Operating Performance, High Leverage; Outlook Stable

U.S.-based Lifetime Brands Inc.'s operating performance deteriorated in 2018 driven by trade-related input cost inflation and a decline in customer orders. The company is also behind plan from its 2018 acquisition of Filament brands, and is now rationalizing and restructuring its European operations. Based on the company's recent underperformance, credit measures have weakened to levels that no longer support the rating and we don't expect them to materially improve, including adjusted debt leverage remaining well above 5x over the next 12 months. We lowered our issuer credit rating on Lifetime to 'B' from 'B+'. The outlook is stable. We also lowered the issue-level ratings on the senior secured term loan to 'B' from 'B+'; the recovery rating is unchanged at '3', indicating expectations of meaningful (50%-70%; rounded estimate:50% recovery in a default. The stable outlook reflects our belief the company will realize fu

Benchmark 2019-B10 Mortgage Trust Certificates Assigned Preliminary Ratings

Benchmark 2019-B10 Mortgage Trust's issuance is a CMBS transaction backed by 46 commercial mortgage loans with an aggregate principal balance of $1.151 billion ($1.256 billion, including 3 Columbus Circle loan specific certificates; $963.603 million of offered certificates), secured by the fee and leasehold interests in 98 properties across 21 states. We assigned our preliminary ratings to the certificates. The preliminary ratings reflect our view of the credit support provided by the transaction's structure, our view of the underlying collateral's economics, the trustee-provided liquidity, and the collateral pool's relative diversity, among other factors. SAN FRANCISCO (S&P Global Ratings) March 18, 2019--S&P Global Ratings today assigned its preliminary ratings to Benchmark 2019-B10 Mortgage Trust's commercial mortgage pass-through certificates (see list). The note issuance is a commercial mortgage-backed securities (CMBS) transaction ba

Abaco Energy Technologies LLC Downgraded To 'CCC+'; Outlook Negative On Upcoming Maturity

Abaco Energy Technologies LLC has a revolving credit facility due in November 2019 (unrated) and a first-lien term loan due in November 2020. We lowered our rating on Abaco to 'CCC+' from 'B-'. The outlook is negative. In addition, we lowered the issue-level rating to 'CCC+' from 'B-'; the recovery rating on this debt remains '3'. The negative outlook reflects the potential difficulty the company may face in refinancing its credit facility. NEW YORK (S&P Global Ratings) March 18, 2019—S&P Global Ratings today took the rating actions listed above. The negative outlook reflects Abaco's weakening liquidity profile with its upcoming credit facility maturity in 2019 (currently undrawn) and term loan in November 2020 and our view that market conditions may make refinancing difficult. The company will face liquidity constraints if it is unable to refinance or demonstrate a capacity to retire this debt with alternate sources o

Outlook On Nine Brazilian Banks Revised Following Lower Downside Risk For The Sector

On March 18, 2019, S&P Global Ratings revised the trend on its Banking Industry Country Risk Assessment (BICRA) of Brazil to stable from negative, reflecting our opinion that the Brazilian economy will continue to recover in the next two years, supporting banks' efforts to stabilize asset quality metrics and reduce the need for additional provisions. We also believe asset quality metrics will continue gradually improving, and the risk of them worsening due to renegotiated and restructured loans has decreased. Moreover, recent corruption investigations in the financial sector involved individual cases that didn't affect the system as a whole, and in our view, the risk for systemic contagion from the investigations has diminished. As a result of the lower downside risk for the sector, we revised the outlook on the issuer credit ratings on nine financial institutions, and at the same time, maintained the stable or negative outlook on five entities. SAO PAULO

Justin C. Jeffries Named Associate Regional Director for Enforcement in Atlanta Office

The Securities and Exchange Commission today announced that Justin C. Jeffries has been named the Associate Regional Director for enforcement in the Atlanta Regional Office.   Mr. Jeffries succeeds Aaron Lipson, who left the agency in December 2018.  In his new role, Mr. Jeffries will oversee the Atlanta office’s enforcement efforts in Georgia, North Carolina, South Carolina, Tennessee, and Alabama. Mr. Jeffries has investigated or supervised a number of significant matters, including those that resulted in the SEC’s charges against: The former chief information officer of a U.S. business unit and a former manager charged with insider trading in advance of a company’s September 2017 announcement of a massive data breach that exposed personal information of approximately 148 million U.S. customers A Raleigh, North Carolina-based investment adviser for running a Ponzi scheme that primarily targeted his clients, many of whom were retired and elderly A Georgia judicial candidate

Twelve Ratings Raised, Six Ratings Affirmed On Four Westlake Automobile Receivables Trust Transactions

We reviewed four Westlake Automobile Receivables Trust transactions, which are ABS transactions backed by subprime auto loan receivables. We raised our ratings on 12 classes from four series. We also affirmed our ratings on six classes from three of the same transactions. The rating actions reflect our views regarding future collateral performance, as well as the transaction's structure and credit enhancement, among other factors. NEW YORK (S&P Global Ratings) March 18, 2019--S&P Global Ratings today raised its ratings on twelve classes and affirmed its ratings on six classes from Westlake Automobile Receivables Trust 2016-1, 2016-2, 2017-2, and 2018-1.(see list). Today's rating actions reflect the series' collateral performance to date and our expectations regarding future collateral performance, as well as the transaction's structure and credit enhancement. Additionally, we incorporated secondary credit factors, including credit stability,

West Deptford Township, NJ, GO Debt Rating Raised To 'AA-' From 'A+' On Improving Financial Metrics

NEW YORK (S&P Global Ratings) March 18, 2019--S&P Global Ratings raised its long-term rating to 'AA-' from 'A+' on West Deptford Township, N.J.'s general obligation (GO) debt outstanding. At the same time, S&P Global Ratings assigned its 'AA-' rating to the township's 2019 series GO bonds. The outlook on all ratings is stable. "The upgrade reflects our view of the improvement in several credit factors--specifically the growth in fund balance and the township's stronger liquidity position," said S&P Global Ratings credit analyst Lauren Freire. Through careful expenditure control and increased revenue through economic development, the township increased its cash position to more than $11.2 million in fiscal 2017 from $4.5 million in fiscal 2015, improving its formerly adequate position to one that we now consider very strong. In addition, the township's fund balance position improved to 16% of expenses from 10

CIFC LLC Ratings Raised To 'BB' On Growth In Assets Under Management And Declining Leverage; Outlook Stable

Robust assets under management (AUM) growth in 2018 placed CIFC in a solid position for the next several years. Given the substantial growth in AUM, leverage has declined below our forecast, and we expect that decline to continue. Consequently, we are raising our issuer credit and senior unsecured issue ratings to 'BB' from 'BB-'. The stable outlook reflects our expectation that CIFC will continue to grow AUM and that leverage will be between 3.0x-4.0x over the next 12 months. NEW YORK (S&P Global Ratings) March 18, 2019--S&P Global Ratings said today it raised its issuer credit rating on CIFC LLC to 'BB' from 'BB-'. The outlook is stable. At the same time, we raised our issue ratings on CIFC's senior unsecured notes to 'BB' from 'BB-'. The recovery rating on the company's debt is '3', indicating our expectation for meaningful recovery. CIFC had solid AUM growth and a significant decline in leve

Sempra Energy And Subsidiaries Ratings Affirmed; Outlook Remains Negative

Earlier this month as part of our ongoing credit surveillance efforts S&P Global Ratings met with several California officials to gain more insight into the possible trajectory of California's regulatory construct for investor-owned electric utilities. We affirmed our ratings on Sempra and its California regulated utility subsidiaries, including our 'BBB+' issuer credit rating on Sempra Energy and subsidiary San Diego Gas & Electric Co. (SDG&E), and our 'A' issuer credit rating on subsidiary Southern California Gas Co. The rating outlooks remain negative for Sempra and these subsidiaries. From our perspective, there appears to be heightened interest on the part of various California officials to take action, possibly in the near term, to address the financial risks that wildfires may pose to California electric utilities, which could potentially lead to a stronger regulatory construct for electric utilities in California. However, the nega

Portugal-Based Banco BPI S.A. And Santander Totta S.A. Upgraded To 'BBB/A-2' After Similar Sovereign Rating Upgrade

On March 15, 2019, we raised our sovereign credit ratings on Portugal to 'BBB/A-2' from 'BBB-/A-3'. The higher sovereign rating allows us to incorporate more parental support into our ratings on Portuguese banks Santander Totta S.A. (Totta) and Banco BPI S.A. (BPI), which both have highly-rated foreign parents. As a result, we are raising to 'BBB/A-2' from 'BBB-/A-3' our issuer credit ratings and resolution counterparty ratings on Totta and on BPI and its core subsidiary Banco Portugues de Investimento S.A. The outlooks on all three banks are stable, mirroring that on the sovereign. MILAN (S&P Global Ratings) March 18, 2019--S&P Global Ratings today raised its long- and short-term issuer credit ratings and resolution counterparty ratings on Portugal-based Santander Totta S.A. (Totta), Banco BPI S.A. (BPI), and BPI's core subsidiary--Banco Portugues de Investimento S.A.--to 'BBB' and 'A-2' from 'BBB-' a

BANK 2019-BNK17 Assigned Preliminary Ratings

BANK 2019-BNK17's issuance is a CMBS transaction backed by 49 commercial mortgage loans with an aggregate principal balance of $833.0 million ($708.3 million of offered certificates), secured by the fee and leasehold interests in 239 properties across 22 states. We assigned our preliminary ratings to the class A-1, A-2, A-SB, A-3, A-4, X-A, X-B, A-S, B, and C certificates. The preliminary ratings reflect our view of the transaction's structure, our view of the underlying collateral's economics, the trustee-provided liquidity, the collateral pool's relative diversity, and our overall qualitative assessment of the transaction. CENTENNIAL (S&P Global Ratings) March 18, 2019--S&P Global Ratings today assigned its preliminary ratings to BANK 2019-BNK17's commercial mortgage pass-through certificates (see list). The note issuance is a commercial mortgage-backed securities transaction backed by 49 commercial mortgage loans with an aggregate princip