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Showing posts from August 16, 2019

Paducah Power System, KY Debt Rating Lowered To 'BBB' On Criteria Application

NEW YORK (S&P Global Ratings) Aug. 16, 2019--S&P Global Ratings lowered its underlying rating (SPUR) and long-term rating on the Electric Power Board of the City of Paducah, Ky.'s power system (d/b/a Paducah Power System [PPS]) to 'BBB' from 'A-'. At the same time, S&P Global Ratings assigned its 'BBB' long-term rating to the utility's $19.9 million series 2019A refunding revenue bonds. The outlook is stable. "The downgrade reflects the application of our ’U.S. Municipal Retail Electric And Gas Utilities: Methodology And Assumptions' criteria," said S&P Global Ratings credit analyst Scott Sagen. The criteria were published Sept. 27, 2018, on RatingsDirect. "The rating action also reflects a combination of the system's very high rates, low income levels, and high debt burden, all of which limit its financial flexibility, coupled with what we view to be an unfavorable power supply concentrated in a single coal-fi

Guarantee Co. of North America 'A-' Ratings Affirmed; Outlook Remains Stable Following Announced Acquisition By Intact

Princeton Holdings announced it will sell GCNA and Frank Cowan Co. to Intact Financial Corp. for around $1 billion. We are affirming our 'A-' ratings on GCNA. The stable outlook reflects our expectation for continued performance in line with the industry and an element of a strategic fit for the new parent. NEW YORK (S&P Global Ratings) Aug. 16, 2019--S&P Global Ratings said today it affirmed its 'A-' long-term issuer credit and financial strength ratings on Guarantee Co. of North America (GCNA) after the announced acquisition by Intact Financial Corp. The outlook is stable. The stable outlook on GCNA reflects our expectation that its financial risk profile will remain strong under the new parent Intact based on public statements. We expect less volatility in underwriting performance, but more-efficient capital management below the 'AAA' redundancy level. Additionally, we expect GCNA to sustain its leading surety presence in Canada, increased mar

New Hope Cultural Education Facilities Finance Corp., TX Bond Rating Lowered To 'BBB(sf)' On Lower Coverage Ratios

CENTENNIAL (S&P Global Ratings) Aug. 16, 2019--S&P Global Ratings lowered its long-term ratings on New Hope Cultural Education Facilities Finance Corp., Texas' senior living revenue bonds (4-K Housing, Inc. – Stoney Brook Project) series 2017A-1 and A-2 (class I) bonds to 'BBB(sf)' from 'A+(sf)', its long-term rating on the corporation's mezzanine series 2017B (class II) bonds to 'BB(sf)' from 'A-(sf)', and its long-term rating on the junior series 2017C (class III) bonds to 'B+(sf)' from 'BBB(sf)'. The outlook for all ratings is stable. "The downgrades reflect our opinion on the projects' material drop in two-year average S&P Global Ratings' debt service coverage (DSC) ratios and very poor loss coverage assessments for all three classes of bonds," said S&P Global Ratings credit analyst Joan Monaghan. Other factors include: Extremely high S&P Global Ratings loan-to-value of 169.8% based o

Willow Winds Inc, TX Bond Ratings Lowered To 'B' On Sharp Coverage Decline

CENTENNIAL (S&P Global Ratings) Aug. 16, 2019--S&P Global Ratings lowered its long-term rating to 'B' from 'A-' on Harris County Cultural Education Facilities Finance Corp., Texas' series 2013A and 2013B senior living housing revenue bonds (The Terrace at Spring Shadows Place apartments project), issued for Willow Winds Inc. At the same time, S&P Global Ratings placed the ratings on CreditWatch with negative implications. "The downgrade and CreditWatch action follow a material deterioration in the project's financial performance in fiscal 2018, as reported in the in April 2019 audit, which caused a sharp decline in maximum annual debt service coverage below 1x," said S&P Global Ratings credit analyst Daniel Pulter. Together, with loss coverage that has weakened to levels we consider highly vulnerable, the rating is capped at 'B+' under our criteria. Furthermore, while the project has utilized cash advances by the owner to hel

H-Bay Ministries, Inc., TX Series 2018 Senior Living Bond Ratings Lowered On Operational Risks; Outlook Stable

CENTENNIAL (S&P Global Ratings) Aug. 16, 2019--S&P Global Ratings lowered its long-term rating on Capital Trust Agency, Fla.'s series 2018 A-1 and 2018A-2 (taxable) senior living bonds to 'BBB(sf)' from 'A-(sf)', and the agency's second-tier 2018B senior living revenue bonds to 'BBB-(sf)' from 'BBB(sf)', issued for H-Bay Ministries, Inc., Texas' Superior Residences project. The outlook for all ratings is stable. "The downgrades follow a revision in our view of the project's strategy and management to adequate from strong, which reflects our updated understanding of owner The Emmaus Calling, Inc.'s track record, strategic planning process, and operational effectiveness," said S&P Global Ratings credit analyst Daniel Pulter. The stable outlook reflects our view that the project will perform at a level commensurate with the rating for each series through the one-year outlook period. We expect the project's

Palm Drive Health Care District, CA Debt Ratings Withdrawn

NEW YORK (S&P Global Ratings) Aug. 16, 2019--S&P Global Ratings withdrew its 'CCC+' long-term rating and underlying rating (SPUR) on Palm Drive Health Care District, Calif.'s series 2000 general obligation bonds, series 2005 parcel tax revenue bonds, and series 2010 parcel tax certificates of participation. These ratings have been withdrawn at the issuer's request.

Minneapolis-St. Paul International Airport, MN Series 2019 Revenue Bonds Assigned 'A+' Rating

CENTENNIAL (S&P Global Ratings) Aug. 16, 2019--S&P Global Ratings assigned its 'A+' long-term rating to the Minneapolis-St. Paul Metro Airports Commission (MAC), Minn.'s estimated $328.6 million series 2019 subordinate airport revenue and revenue refunding bonds, issued for the Minneapolis-St. Paul International Airport (MSP). At the same time, S&P Global Ratings affirmed its 'AA-' long-term rating on the airport's senior airport revenue bonds, and its 'A+' long-term rating on the airport's subordinate airport revenue bonds outstanding. The outlook is stable. "The ratings reflect our opinion of MSP's very strong enterprise risk profile and strong financial risk profile," said S&P Global Ratings credit analyst Scott Shad. The enterprise risk profile reflects our view of the airport's: Very strong market position; Extremely strong service area economic fundamentals; Low industry risk relative to that of other

Zebra Technologies Corp.'s Refinanced Revolving Credit Facility, Senior Secured Term Loan A Rated 'BBB-'

NEW YORK (S&P Global Ratings) Aug. 16, 2019--S&P Global Ratings today assigned its 'BBB-' issue-level rating and '2' recovery rating to Zebra Technologies Corp.'s recently refinanced revolving credit facility and senior secured term loan A. The '2' recovery rating indicates our expectation of substantial (70%-90%; rounded estimate: 85%) recovery for lenders in the event of a payment default. Post transaction Zebra's capital structure now comprises a $1 billion revolving credit facility due 2024 and a $1 billion term loan A also due 2024 (consisting of a $608 million term loan A-1 and a $392 million term loan A-2). Zebra's term loan B facility maturing October 2021 has been repaid in conjunction with this refinancing and we will withdrawn our existing ratings on this debt accordingly. Our 'BB+' issuer credit rating on Zebra is unaffected by this leverage-neutral transaction.

Internap Corp. Downgraded To 'CCC+' On Weak Operating Performance; Outlook Negative; Debt Ratings Lowered

U.S. data center operator Internap Corp.'s operating and financial performance continue to decline, resulting in forecast S&P Global Ratings-adjusted leverage of about 7x through 2020. S&P Global Ratings lowered all ratings on the company by one notch, including our issuer credit rating, to 'CCC+' from 'B-', as we believe the capital structure may be unsustainable longer term. The negative outlook reflects the potential for a lower rating if we believe a default or restructuring is likely within the next 12 months. NEW YORK (S&P Global Ratings) Aug. 16, 2019—S&P Global Ratings today took the rating actions above. The downgrade reflects our view that the capital structure may be unsustainable longer-term given declining earnings, limited cash generation and declining investment in the business to preserve liquidity. Even with lower capital spending, we forecast limited free cash flow generation over the next several years. We also believe reduci

BMO Reinsurance Ltd. 'A+' Rating Affirmed; Outlook Stable

We consider BMO Re a strategically important subsidiary to Bank of Montreal, with a very strong competitive position in the Canadian creditor life reinsurance market. We are affirming our 'A+' rating on BMO Re. The stable outlook reflects our expectation that the company will maintain its very strong competitive position and 'AAA' level capitalization. NEW YORK (S&P Global Ratings) Aug. 16, 2019--, S&P Global Ratings said today it affirmed its 'A+' insurer financial strength rating on BMO Reinsurance Ltd. The outlook is stable. The stable outlook on BMO Re reflects our expectation that it will maintain its very strong competitive position over the next 18-24 months, supported by its profitable, well-established creditor life reinsurance business, while maintaining capital adequacy at the 'AAA' level per our risk-based capital model. We may lower our ratings in the next 12-24 months if: BMO Re's competitive position weakens, as dem

BlackRock TCP Capital Corp.'s Proposed Unsecured Notes Due 2024 Rated 'BBB-'

NEW YORK (S&P Global Ratings) Aug. 16, 2019--S&P Global Ratings today assigned its 'BBB-' debt rating on BlackRock TCP Capital Corp.'s (TCPC) proposed issuance of unsecured notes due 2024. TCPC intends to use the proceeds from this offering to pay down its revolving credit facilities. As of June 2019, TCPC's leverage, measured as debt to adjusted total equity (ATE), was 1.06x, compared with 0.95x at year-end 2018. As of June 2019, the firm's loans on nonaccrual at cost were 3.2% and its investment portfolio at fair value was about $1.7 billion ($1.78 billion cost), compared with 0% and $1.6 billion ($1.65 billion), respectively, at year-end 2018. As of June 2019, the asset coverage ratio was 200%, above the 150% requirement under the SVPC and TCPC funding facilities. The key earnings metrics for 12 months ending June 2019 relative to our key thresholds for assessing earnings are: Non-deal-dependent coverage of interest expense: 2.9x (3.0x threshold), Non

Bay City, TX GO Debt Outlook Revised To Stable From Negative On Improved Budgetary Performance

NEW YORK (S&P Global Ratings) Aug. 16, 2019--S&P Global Ratings revised its outlook to stable from negative and affirmed its 'A+' rating on Bay City, Texas' general obligation debt outstanding. "The outlook revision reflects the city's achievement of structural balance in its budget, through tax revenue increases, and commitment to restoring reserves," said S&P Global Ratings credit analyst Tiffany Tribbitt. The rating further reflects our opinion of the following credit factors: Very weak economy, with projected per capita effective buying income at 72.0% of the national level and market value per capita of $47,909; Adequate management, with standard financial policies and practices under our Financial Management Assessment methodology; Strong budgetary performance, with operating surpluses in the general fund and at the total governmental fund level in fiscal 2018; Very strong budgetary flexibility, with an available fund balance in fis

Swedish City of Boras 'AA+/A-1+' And 'K-1' Ratings Affirmed; Outlook Stable

Given the City of Borås's growing population, we anticipate increased operating spending and high investments through 2021. That said, we forecast Borås will maintain stable operating margins, and moderate deficits after capital accounts, on the back of conservative policies and budgetary discipline. We are affirming our 'AA+/A-1+' and 'K-1' ratings on Borås. The outlook is stable. Rating Action On Aug. 16, 2019, S&P Global Ratings affirmed its 'AA+' long-term and 'A-1+' short-term issuer credit ratings on the Swedish City of Borås. The outlook is stable. At the same time, we affirmed our 'K-1' Nordic regional scale rating on the city. Outlook The stable outlook reflects our expectation that through 2021 Borås will uphold a stable operating performance, and post moderate deficits after capital accounts, despite increasing operating spending and high investments. We also expect management will remain committed to its prudent

Austrian State of Tyrol 'AA+/A-1+' Ratings Affirmed; Outlook Stable

Tyrol faces a more challenging economic and less predictable institutional backdrop, but we believe it will continue to exercise strong budgetary discipline. We forecast Tyrol will achieve near-balanced accounts on average over 2019-2022 and maintain a broadly unchanged ratio of debt to operating revenue, although a major construction project likely will cause temporary, small deficits. We are affirming our 'AA+/A-1+' ratings on Tyrol and maintaining the stable outlook. Rating Action On Aug. 16, 2019, S&P Global Ratings affirmed its 'AA+' long-term and 'A-1+' short-term issuer credit ratings on the Austrian State of Tyrol. The outlook is stable. Outlook We base our stable outlook on Tyrol on the assumption that the state will continue to focus on budgetary discipline and implement appropriate policy adjustments where needed, thus maintaining structurally balanced accounts on average, despite a more challenging environment. However, we anticipate

Kentucky Municipal Power Agency Debt Rating Lowered To 'BBB' After Paducah Power System Downgrade

NEW YORK (S&P Global Ratings) Aug. 16, 2019--S&P Global Ratings lowered its underlying rating (SPUR) and long-term rating on the Kentucky Municipal Power Agency's (KMPA) power system revenue debt to 'BBB' from 'A-'. At the same time, we assigned our 'BBB' long-term rating to KMPA's $116.8 million series 2019A (Prairie State Project) power system revenue refunding bonds and $19.3 million series 2020A (Prairie State Project) forward delivery power system revenue refunding bonds. The outlook is stable. "The downgrade of KMPA revenue debt is based on the rating action on the Electric Power Board of the City of Paducah's power system (d/b/a Paducah Power System [PPS])," said S&P Global Ratings credit analyst Scott Sagen. The negative rating action on PPS reflects the application of our "U.S. Municipal Retail Electric And Gas Utilities: Methodology And Assumptions" criteria (published Sept. 27, 2018). The rating action al

Swedish Municipality of Vellinge 'AA+/A-1+' And 'K-1' Ratings Affirmed; Outlook Stable

We anticipate pressure on Vellinge's operating balance over the coming two years, due to increased operating spending caused by population growth. That said, we consider that the municipality's budgetary discipline will allow it to uphold its fiscal position. We are affirming our 'AA+/A-1+' and 'K-1' ratings on Vellinge. The outlook is stable. Rating Action On Aug. 16, 2019, S&P Global Ratings affirmed its 'AA+' long-term issuer credit rating on the Swedish municipality of Vellinge. The outlook is stable. At the same time, we affirmed our 'A-1+' short-term issuer credit rating and 'K-1' Nordic regional scale rating. Outlook The stable outlook reflects our expectation that over the next two years Vellinge will maintain its operating margin above 5% of revenues on average, supported by strong budgetary discipline, despite increased spending stemming from a growing population. At the same time, we anticipate Vellinge will

Enjoy S.A. Outlook Revised To Negative From Stable On Lower Earnings And Higher Leverage; 'B' Ratings Affirmed

Enjoy's EBITDA was notably down last year and we don't expect it to recover this year. We've made considerable haircuts to our EBITDA projections for 2019 and 2020. As a result, we're also revising our leverage expectations. On Aug. 16, 2019, S&P Global Ratings revised its outlook on Enjoy to negative from stable and affirmed its 'B' ratings on Enjoy and on its senior secured notes. The negative outlook reflects our expectation for Enjoy's leverage to reach close to 6.0x this year and the challenges management faces to improve earnings and reduce leverage to closer to 5.0x. BUENOS AIRES (S&P Global Ratings) Aug. 16, 2019--Enjoy's results since the third quarter of 2018 have been considerably weaker than expected because of a combination of weaker economic conditions, misguided commercial decisions, and inherent business impact (lower hold; the percentage the casino gains), and we believe the impact will last throughout most of this year. F