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Showing posts from May 14, 2019

KCC Corp. Downgraded To 'BBB-' On Rising Leverage From Momentive Acquisition; Outlook Stable

KCC Corp.'s acquisition of Momentive Performance Materials will increase its leverage over the next two to three years. We expect the company's adjusted debt to rise to about Korean won (KRW) 4.5 trillion in 2019, compared with our previous estimate of KRW1.3 trillion. KCC is likely to remain a large building materials company in Korea. On May 15, 2019, S&P Global Ratings lowered its long-term issuer credit rating on KCC to 'BBB-' from 'BBB'. We removed the rating from CreditWatch, where it was placed with negative implications on Feb. 15, 2019. The stable outlook reflects our expectation that KCC's market position would help it to generate steady operating cash flows to temper the impact of the increase in leverage over the next 24 months. HONG KONG (S&P Global Ratings) May 15, 2019--S&P Global Ratings today took the rating actions listed above. We lowered the rating to reflect our view that KCC's leverage will increase over the nex

Emerson Electric Co. Proposed Euro Notes Rated 'A'

NEW YORK (S&P Global Ratings) May 15, 2019--S&P Global Ratings today assigned its 'A' issue-level rating to St. Louis–based Emerson Electric Co.'s proposed euro senior unsecured notes. The notes will have a five-year tenor due in 2024. We expect the company to use the proceeds to pay down the outstanding borrowings under its commercial paper program. All of our other ratings on Emerson, including our 'A' long-term issuer credit rating and 'A-1' short-term rating, are unchanged.

Shandong Ruyi Technology Outlook Revised To Negative On Uncertain Deleveraging Plan; 'B' Rating Affirmed

Ruyi's debt leverage could remain elevated and its liquidity buffer could narrow if the company fails to restore the growth of its operating profit or continues to make aggressive capital investments over the next 12 months. The company's satisfactory access to the domestic credit market in China and the good operating performance of SMCP, Ruyi's overseas fashion apparel subsidiary, temper the risks. On May 15, 2019, S&P Global Ratings revised its outlook on Ruyi to negative from stable. At the same time, we affirmed our 'B' long-term issuer credit rating on the company. We also affirmed our 'B-' long-term issue rating on the senior unsecured notes that Ruyi guarantees. The negative outlook reflects our view that Ruyi's refinancing risk could heighten over the next 12 months if its operating cash flow stays weak or if its expansion appetite remains aggressive. HONG KONG (S&P Global Ratings) May 15, 2019--S&P Global Ratings today took t

Preliminary Ratings Assigned To Dutch RMBS Transaction Domi 2019-1

We have assigned preliminary ratings to Domi 2019-1's mortgage-backed floating-rate notes. The transaction securitizes a pool of Dutch mortgage loans secured on buy-to-let residential properties. LONDON (S&P Global Ratings) May 15, 2019--S&P Global Ratings today assigned preliminary credit ratings to Domi 2019-1 B.V.'s mortgage-backed floating-rate class A, B-Dfrd, C-Dfrd, D-Dfrd, E-Dfrd notes, and X notes (which is not collateralized). At closing, Domi 2019-1 will also issue unrated class F-Dfrd and Z notes (see list below). Our preliminary ratings reflect timely receipt of interest and ultimate repayment of principal for the class A notes. The preliminary ratings assigned to the class B-Dfrd to E-Dfrd, and X notes are interest-deferred ratings and address the ultimate payment of interest and principal. All of the loans in the pool have been originated by Domivest B.V., which is also the seller and master servicer in the transaction. This is the fir

Enel's Proposed Junior Subordinated Hybrid Capital Securities Rated 'BBB-'

Enel plans to issue junior subordinated hybrid securities to refinance its existing €750 million hybrid, issued in 2014, with a first call date in January 2020. In addition, Enel launched a capped exchange offer on the 2014 €750 million hybrid and the remaining €513 million hybrid issued in 2013 with a call date in 2024. We assess the proposed securities as having intermediate equity content, and we believe the proposed transaction does not impair our view of permanence of the hybrid layer within Enel's capital structure. We are assigning our 'BBB-' issue rating to Enel's proposed securities to reflect their subordination and optional deferability. PARIS (S&P Global Ratings) May 15, 2019--S&P Global Ratings today assigned its 'BBB-' long-term issue rating to the proposed hybrid capital securities to be issued by Enel SpA (BBB+/Stable/A-2). The amount of the new hybrid remains subject to market conditions. The proceeds will be used to replace Enel&

Austria-Based Erste Group Bank AG's First Issuance Of Senior Nonpreferred Notes Rated 'A-'

Erste Group Bank AG (Erste) plans to issue its first senior nonpreferred notes, which will contractually rank below its senior unsecured debt, but above subordinated debt and junior instruments. We understand the proposed notes would be subject to conversion or write-down in a resolution after junior instruments, but before more senior obligations including senior preferred notes. We are assigning our 'A-' issue rating to the proposed notes. The rating is one notch lower than our assessment of Erste's stand-alone credit profile (SACP), owing to our view that the proposed notes are subordinated to more senior obligations and do not carry additional default risk. FRANKFURT (S&P Global Ratings) May 15, 2019--S&P Global Ratings today assigned its 'A-' long-term issue rating to the €500 million seven-year senior nonpreferred notes to be issued by Austria-based Erste Group Bank AG (A/Positive/A-1). The rating is subject to our review of the notes' fin

Ratings Assigned To European Cash Flow CLO Transaction Clarinda Park CLO's Refinanced Notes

On May 15, 2019, Clarinda Park CLO refinanced the class A-1 to D notes (originally issued in 2016) through an optional redemption and issue replacement notes. We have assigned our preliminary ratings to Clarinda Park CLO's class A-1R, A-2R, B-R, C-R, and D-R notes (the refinanced notes). At the same time, we have affirmed our rating on the existing class E notes, which were not refinanced. The transaction is a broadly syndicated CLO managed by Blackstone/GSO Debt Funds Management Europe. LONDON (S&P Global Ratings) May 15, 2019--S&P Global Ratings today assigned credit ratings to Clarinda Park CLO DAC's (Clarinda CLO) class A-1R, A-2R, B-R, C-R, and D-R notes. At the same time, we have affirmed our rating on the existing class E notes (see list below). On May 15, 2019, the issuer refinanced the original class A-1 to D notes by issuing replacement notes of the same notional for each class. The replacement notes are largely subject to the same terms an

MISC's US$ Loan Facility Rating Affirmed At 'BBB+'; Rating Then Withdrawn At The Issuer's Request

SINGAPORE (S&P Global Ratings) May 15, 2019--S&P Global Ratings today affirmed its 'BBB+' long-term issue rating on the US$1.55 billion senior unsecured loan facility issued by MISC Capital (L) Ltd. The parent of MISC Capital, MISC Bhd., guarantees the facility. We subsequently withdrew the rating at the issuer's request. The outstanding amount of the facility is US$290 million as of Dec. 31, 2018.

Parampujya Solar Energy Restricted Group's Proposed Debt Assigned Preliminary 'BB+' Rating; Outlook Stable

India-based Parampujya Solar Energy Pvt. Ltd. Restricted Group (PSEPL RG) is proposing to issue a US$500 million senior secured fixed-rate five-year bond and a Indian rupee (INR) 11 billion rupee loan to refinance its existing loans, and pay refinancing fees and transaction costs. PSEPL RG operates a pool of 25 solar assets spread across eight states in India. It sells power to Indian utilities under fixed-price long-term power purchase agreements (PPAs). On May 15, 2019, we assigned our preliminary 'BB+' long-term issue rating to the proposed bond, reflecting PSEPL RG's moderate to low debt service coverage ratio (DSCR) and predictability of cash flows. The stable outlook reflects our expectation that PSEPL RG's P90 operating performance and timely receivable collections will allow the company to maintain DSCR above 1.2x over the next 12-24 months. SINGAPORE (S&P Global Ratings) May 15, 2019--S&P Global Ratings today assigned its preliminary 'BB+'

KCC Corp. Downgraded To 'BBB-' On Rising Leverage From Momentive Acquisition; Outlook Stable

KCC Corp.'s acquisition of Momentive Performance Materials will increase its leverage over the next two to three years. We expect the company's adjusted debt to rise to about Korean won (KRW) 4.5 trillion in 2019, compared with our previous estimate of KRW1.3 trillion. KCC is likely to remain a large building materials company in Korea. On May 15, 2019, S&P Global Ratings lowered its long-term issuer credit rating on KCC to 'BBB-' from 'BBB'. We removed the rating from CreditWatch, where it was placed with negative implications on Feb. 15, 2019. The stable outlook reflects our expectation that KCC's market position would help it to generate steady operating cash flows to temper the impact of the increase in leverage over the next 24 months. HONG KONG (S&P Global Ratings) May 15, 2019--S&P Global Ratings today took the rating actions listed above. We lowered the rating to reflect our view that KCC's leverage will increase over the nex

SCS Holdings I Inc. Rating Affirmed On Proposed LBO By CD&R; New Debt Rated

Clayton, Dubilier, & Rice (CD&R), a private equity sponsor, is acquiring San Antonio, Texas-based technology solutions provider SCS Holdings I Inc. (the holding company of Sirius Computer Solutions Inc.), for approximately $1.5 billion, partially funding the transaction with $1.05 billion of debt. The leveraged buyout (LBO) will result in pro forma leverage around 6.7x by year-end 2019, higher than our previous expectation for a leverage decline to the low-6x area by year-end 2019, but within our current rating threshold. We affirmed our 'B' issuer credit rating on SCS Holdings I Inc. (Sirius). The outlook is stable. We also assigned a 'B' issue-level rating and '3' recovery rating to Sirius' proposed first-lien senior secured credit facilities, consisting of $750 million term loan and $190 million revolver, and a 'CCC+' issue-level rating and '6' recovery rating to the proposed $300 million senior unsecured notes. The stable out

CDRH Parent Inc. Downgraded To 'CCC+' On Greater Risk Of Debt Restructuring; Outlook Negative; Debt Ratings Also Lowered

Jacksonville, Fla.–based wound care services provider CDRH Inc. (doing business as Healogics Inc.) reported a decline in net revenue primarily due to lower HBO treatments and center count, which, coupled with its heavy debt burden, has weakened liquidity, bringing the EBITDA-to-interest-coverage ratio to about 1.0x. Despite the recently launched innovation services and solutions business, we see escalated risk for a debt restructuring before the revolver and term loan become due on July 1, 2021. We are lowering our issuer credit rating on CDRH Parent Inc. to 'CCC+' from 'B-' At the same time, we are lowering the issue-level rating on the company's senior secured term to 'CCC+'. We are also revising the recovery rating to '4' from '3', indicating our expectation of average (30%-50%; rounded estimate: 45%) recovery in the event of a payment default. The negative outlook reflects our opinion about the lack of significant improvement in oper

Transportadora de Gas del Peru 'BBB+' Ratings Affirmed, Taken Off UCO On Application Of Updated Criteria; Outlook Stable

SAO PAULO (S&P Global Ratings) May 14, 2019--S&P Global Ratings removed its ratings on Transportadora de Gas del Peru SA (TGP) from "under criteria observation" (UCO) after publishing updated criteria. We're affirming our 'BBB+' issuer and issue-level credit ratings on TGP. The outlook on the ratings is stable. After publishing our revised criteria, "Ratios and Adjustments," on April 1, 2019, and with our criteria review complete, we're removing the UCO designation from these ratings. We're affirming our 'BBB+' issuer credit ratings on TGP and the issue-level credit ratings on TGP's $850 million senior unsecured debt. For more information on TGP, see the report published on May 22, 2018: "Transportadora de Gas del Peru S.A. 'BBB+' Corporate Credit And Issue-Level Ratings Affirmed; Outlook Still Stable." The stable outlook on TGP incorporates our view that the company will continue to post strong ope

CFG Investments Ltd. Series 2017-1 Ratings Affirmed Following Panama Upgrade

CFG Investments Ltd.'s series 2017-1 issuance is an ABS transaction backed by unsecured personal loan receivables from four different jurisdictions--Aruba, Curaçao, Bonaire, and Panama; the largest receivables exposure is to Panama. We affirmed our 'BBB (sf)' and 'BB (sf)' ratings to the class A and B notes, respectively, following our upgrade of the Republic of Panama to 'BBB+'. The ratings reflect our view of the transaction's credit support, operational risks, and its payment and legal structures, among other factors. NEW YORK (S&P Global Ratings) May 14, 2019--S&P Global Ratings today affirmed its ratings on CFG Investments Ltd.'s series 2017-1 notes (see list) following the upgrade of the sovereign of Panama to 'BBB+' from 'BBB.' The note issuance is an asset-backed securities (ABS) transaction backed by unsecured personal loan receivables, or beneficial interests therein, from four different jurisdictio

Chevron Corp. Ratings Removed From CreditWatch Negative; Outlook Returned To Stable On Anadarko Merger Cancellation

Anadarko Petroleum has terminated its merger agreement with Chevron Corp., following its acceptance of Occidental Petroleum's rival offer. Chevron has received a $1 billion breakup fee. Chevron has increased expected share repurchases to $5 billion per year. Our issuer credit and senior unsecured ratings on Chevron remain 'AA' and our short-term and commercial paper ratings on the company remain 'A-1+'. We are removing the ratings from CreditWatch with negative implications. We are returning the outlook to stable, reflecting our expectation that Chevron will maintain funds from operations (FFO)/debt above 60% and debt/EBITDAX below 1.5x, while increasing production 4%-7% in 2019 and attaining a compound average growth rate of 3%-4% through 2023. NEW YORK (S&P Global Ratings) May 14, 2019—S&P Global Ratings today took the rating actions listed above. We removed our ratings on Chevron from CreditWatch with negative implications, where we placed them on

Various Rating Actions Taken On 22 Classes From 12 U.S. RMBS Transactions

We reviewed 22 ratings from 12 U.S. RMBS transactions issued between 2003 and 2007. The transactions are backed by closed-end second lien and HELOC collateral. Of the 22 ratings, we raised two, lowered three, and affirmed 17. SAN FRANCISCO (S&P Global Ratings) May 14, 2019--S&P Global Ratings today completed its review of 22 classes from 12 U.S. residential mortgage-backed securities (RMBS) transactions issued between 2003 and 2007. The transactions are backed by closed-end second-lien and home equity line of credit (HELOC) collateral. The review yielded two upgrades, three downgrades, and 17 affirmations. ANALYTICAL CONSIDERATIONS We incorporate various considerations into our decisions to raise, lower, or affirm ratings when reviewing the indicative ratings suggested by our projected cash flows. These considerations are based on transaction-specific performance or structural characteristics (or both) and their potential effects on certain classes. Some of these consi

Wylie Independent School District Collin County, TX GO Rating Raised To 'AA-' On Assessed Value Growth

CENTENNIAL (S&P Global Ratings) May 14, 2019--S&P Global raised its underlying rating to 'AA-' from 'A+' on Wylie Independent School District (Collin County), Texas' general obligation (GO) bonds. The outlook is stable. "The upgrade reflects the continued growth of the district's assessed value, which has increased 64% since fiscal 2014 to $5.93 billion in fiscal 2019, as well as the district's ability to increase its very strong fund balance to 43.3% of expenditures from 29.6% in fiscal 2014, while managing rapidly growing enrollment and a high overall net debt burden," said S&P Global Ratings credit analyst Calix Sholander. It is our expectation that the district's overall net debt burden will remain high, given the district's slower-than-average amortization rate and with the recent approval of a $193.7 million bond package, which the district expects to issue over the next two to three years. Although we view the distri