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Showing posts from September 6, 2019

Olathe Medical Center Inc., KS Revenue Bond Outlook Revised To Negative On Operating Losses

CENTENNIAL (S&P Global Ratings) Sept. 6, 2019--S&P Global Ratings revised the outlook to negative from stable and affirmed its 'A+' long-term rating on Olathe, Kan.'s revenue bonds outstanding, issued for Olathe Medical Center Inc. (OMCI). "The outlook revision reflects our view of OMCI's operating losses in 2018 and into interim 2019, despite the expectation at our previous review that 2019 results would be near break-even," said S&P Global Ratings credit analyst Ashley Henry.

DexKo Global Inc. Subsidiary's Proposed Incremental First-Lien Term Loan Rated 'B'

NEW YORK (S&P Global Ratings) Sept. 6, 2019--S&P Global Ratings today assigned its 'B' issue-level and '3' recovery rating to AL-KO VT Holdings GMBH's proposed €180 million first-lien term loan maturing in 2024. The '3' recovery rating indicates our expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a default. The incremental nonfungible term loan will have terms identical to the company's existing first-lien term loans. We expect the company will use the proceeds to fund the acquisition of Safim S.p.A., a European manufacturer of valves and cylinders. Our 'B' issuer credit rating and stable outlook on parent company DexKo Global Inc. are unchanged. The issue-level rating on the company's first-lien debt remains 'B' with a '3' recovery rating (rounded estimate: 55%), and the issue-level rating on the company's second-lien debt remains 'CCC+' with a '6' recovery r

World Financial Network Credit Card Master Note Trust Series 2019-C Notes Assigned Preliminary Ratings

World Financial Network Credit Card Master Note Trust's issuance is an ABS transaction backed by a collateral certificate representing an ownership interest in the receivables held by World Financial Network Credit Card Master Trust. The receivables are generated under consumer credit card accounts originated through various merchant agreements. We assigned our preliminary ratings to the class A and M notes. The preliminary ratings reflect our view of the transaction's credit support, minimum seller's interest, cash flow mechanics, and legal structure, among other factors. NEW YORK (S&P Global Ratings) Sept. 6, 2019--S&P Global Ratings today assigned its preliminary ratings to World Financial Network Credit Card Master Note Trust's asset-backed notes series 2019-C (see list). The note issuance is an ABS transaction backed by a collateral certificate representing an ownership interest in the receivables held by World Financial Network Credit Card

Optimas OE Solutions Holding LLC Downgraded To 'CCC+' On Weak Performance And Refinancing Risk; Outlook Negative

U.S.-based engineered fastener distributor Optimas OE Solutions Holding LLC reported poor operating performance for its second quarter 2019 and we now view the capital structure as unsustainable. We are lowering our issuer credit rating on Optimas to 'CCC+' from 'B-'. At the same time we are lowering our issue-level ratings on the company's senior secured notes to 'CCC' from 'CCC+'. The recovery rating remains '5', indicating our expectation for modest (10%-30%; rounded estimate: 20%) recovery in a payment default. The negative outlook reflects our view that end markets will remain challenged over the next year, resulting in negative free cash flow and presenting potential challenges for Optimas to refinance its $225 million senior secured notes at par. NEW YORK (S&P Global Ratings) Sept. 6, 2019--S&P Global Ratings today took the rating actions listed above. The downgrade reflects S&P Global Ratings' view that Optimas&

Edgewell Personal Care Co. Rating Lowered To 'BB-'; Debt Ratings Lowered, Removed From CreditWatch; Outlook Negative

U.S.-based Edgewell Personal Care Co. has launched the syndication of its $610 million senior secured term loan B, which in combination with its already syndicated $425 million senior secured revolver and $565 million senior secured term loan A, will constitute the debt financing for its $1.37 billion acquisition of Harry's Inc. Pro forma adjusted leverage will increase to the low-6x area, compared to around 3.5x as of June 30, 2019, though we project adjusted leverage will fall to around 5x within 12 months of acquisition close and 4x within 24 months. We are lowering our issuer credit rating on Edgewell by one notch to 'BB-' and our issue-level rating on the senior unsecured notes by two notches to 'B+' and removing them from CreditWatch, where they were placed with negative implications on May 10, 2019. Due to the sizable secured bank debt in the proposed capital structure, the recovery rating on the senior unsecured notes is revised to '5', indicating

Maplewood, MO GO Rating Outlook Revised To Negative On Budgetary Performance

CENTENNIAL (S&P Global Ratings) Sept. 6, 2019--S&P Global Ratings revised the outlook to negative from stable and affirmed its 'AA' long-term rating on Maplewood, Mo.'s general obligation debt. "The outlook revision reflects our view of the city's recent trend of weak budgetary performance, which we anticipate will continue through at least fiscal 2020," said S&P Global Ratings credit analyst Katelyn Kerley.

Banco de Chile's Proposed PEN140 Million Senior Unsecured Notes Rated 'A'

SAO PAULO (S&P Global Ratings) Sept. 6, 2019--S&P Global Ratings assigned its 'A' issue-level rating on Banco de Chile's (A/Stable/A-1) proposed PEN140 million senior unsecured notes due Sept. 10, 2034. The issuance is part of the bank's $3 billion medium-term notes program. The bank will use the proceeds primarily for general corporate purposes. Our rating on the notes reflects their pari passu ranking with the bank's other senior unsecured debt obligations. As a result, the rating is the same as the long-term issuer credit rating on the bank. The notes constitute less than 0.1% of Banco de Chile's total funding base. Therefore, this issuance doesn't change our view of the bank's funding profile and does not increment refinancing risk. Banco de Chile has a well-established brand and diversified market access in the highly competitive Chilean banking system, factors that confer steady revenue flow. Moreover, the bank's sound asset qualit

Guggenheim CLO 2019-1 Ltd./Guggenheim CLO 2019-1 LLC Notes Assigned Preliminary Ratings

Guggenheim CLO 2019-1 Ltd./Guggenheim CLO 2019-1 LLC's issuance is a CLO transaction backed by a diversified collateral pool, which consists primarily of broadly syndicated speculative-grade senior secured term loans that are governed by collateral quality tests. We assigned our preliminary ratings to the class A-1A, A-2, B, C, and D notes. We also assigned our preliminary ratings to the exchangeable note combination notes. The preliminary ratings reflect our view of the transaction's credit enhancement, legal structure, and the collateral manager's experienced team, among other factors. CENTENNIAL (S&P Global Ratings) Sept. 6, 2019--S&P Global Ratings today assigned its preliminary ratings to Guggenheim CLO 2019-1 Ltd./Guggenheim CLO 2019-1 LLC's floating-rate notes and MASCOT notes (see list). The note issuance is a CLO transaction backed by a diversified collateral pool, which consists primarily of broadly syndicated speculative-grade (rated

Herbalife Nutrition Ltd. Upgraded To 'BB-'; Outlook Stable

U.S-based Herbalife Nutrition Ltd. paid off the remaining $675 million convertible notes due Aug. 15, 2019. We assume the direct sales firm will manage adjusted leverage in the low- to mid-3x area (compared to the mid-2x area pro forma for the 2019 convertible note repayment). On Sept. 6, 2019, S&P Global Ratings raised its issuer credit rating on Herbalife to 'BB-' from 'B+' and issue-level rating on the senior secured term loan B to 'BB+' from 'BB' and affirmed the 'BB-' rating on the $400 million senior unsecured notes. The recovery rating on the secured term loan B remains '1' (90% to 100%; rounded estimate: 95%), while we revised the recovery rating on the unsecured notes to '3' (50% to 70%, rounded estimate: 65%) from '2'. The stable outlook reflects our expectation that the company will manage adjusted leverage at or below 3.5x because of its satisfactory performance in North America, EMEA, and Asia Pacific,

Greater Orlando Aviation Authority, FL Series 2019A Airport Facilities Revenue Bonds Assigned 'AA-' Rating

NEW YORK (S&P Global Ratings) Sept. 6, 2019--S&P Global Ratings assigned its 'AA-' long-term rating to the Greater Orlando Aviation Authority (GOAA or the authority), Fla.'s series 2019A airport facilities revenue bonds. At the same time, S&P Global Ratings affirmed its 'AA-' long-term rating and underlying rating (SPUR) on GOAA's airport facilities revenue bonds outstanding, and its 'A+' rating on the authority's subordinate airport facilities revenue bonds outstanding. The outlook is stable. "The ratings reflect our opinion of GOAA's very strong enterprise risk profile and strong financial risk profile," said S&P Global Ratings credit analyst Joe Pezzimenti. The enterprise risk profile reflects our view of GOAA's: Very strong market position; Extremely strong economic fundamentals in the primary air service area; Low industry risk relative to that of other industries and sectors; and Extremely strong mana

Unigel Participacoes Global Scale Rating Outlook Revised To Positive From Stable On Stronger Liquidity

Cash flows of Brazil-based chemical producer Unigel ParticipaƧƵes S.A. are rising primarily due to production flexibility and increased operational efficiency. On Sept. 6, 2019, S&P Global Ratings affirmed its global scale 'B+' issuer credit and issue-level ratings. At the same time, we raised our national scale rating to 'brAA' from 'brAA-'. We also revised our global scale rating outlook to positive from stable to reflect the improved liquidity position and our forecast that the company would generate free operating cash flow and further strengthen its leverage measures. SAO PAULO (S&P Global Ratings) Sept. 6, 2019--S&P Global Ratings took rating actions described above. The positive global scale rating outlook reflects our view that we could upgrade Unigel during the next 12 months if it presents consistent volumes and profitable margins, continues to generate free operating cash flow, and its improved operating results cause leve

Lexington City School District, OH COP Rating Lowered To 'A-' On Persistent Structural Imbalance, Outlook Is Negative

CHICAGO (S&P Global Ratings) Sept. 6, 2019--S&P Global Ratings lowered its rating by one notch to 'A-' from 'A' on New Lexington City School District, Ohio's outstanding certificates of participation (COPs). The outlook is negative. "The downgrade and negative outlook reflect our view of the district's weakened available cash balances as a result of a persistent structural imbalance," said S&P Global Ratings credit analyst Taylor Budrow. "Rising expenditures, including special education and insurance costs, have resulted in the district's use of available cash balances beginning in fiscal 2017 with further declines expected to be reported in fiscals 2019 and 2020," Mr. Budrow added. The ratings reflect our opinion of the district's: Low to adequate income and adequate market value per capita indicators; Adequate available cash balances; and Persistent structural imbalance, coupled with increasing expenditures.

Dynamic Precision Group Inc. Outlook Revised To Positive From Stable On Improving Credit Metrics; 'B-' Rating Affirmed

Dynamic Precision Group Inc. (DPG)'s credit metrics improved more than expected over the past 12 months, due to good revenue growth, improving profitability, and no acquisitions or shareholder returns, a trend we expect to continue. Therefore on Sept. 6, 2019, S&P Global Ratings is revising its outlook on DPG to positive from stable, and affirming the ratings, including the 'B-' issuer credit rating. The positive outlook reflects an increased likelihood of an upgrade as debt to EBITDA is likely to remain well below our 6.5x upgrade trigger, as margins increase from the potential return to service for the Boeing 737 MAX and the company addresses the December 2020 maturity of its credit facility. NEW YORK (S&P Global Ratings) Sept. 6, 2019—S&P Global Ratings today took the above-listed rating actions. The positive outlook reflects our expectation that DPG's credit metrics will continue to improve in 2019 and 2020, and will likely remain below our 6.5x

Silvis, IL General Obligation Debt Rating Lowered To 'A+' From 'AA-' On Rising Pension Obligations

CHICAGO (S&P Global Ratings) Sept. 6, 2019--S&P Global Ratings lowered its unenhanced long-term rating on the City of Silvis, Ill.'s general obligation (GO) debt to 'A+' from 'AA-'. The outlook is stable. "The downgrade reflects the city's rising pension and other postemployment liabilities," said S&P Global Ratings credit analyst Joseph Vodziak. In recent years, fixed carrying charges have been increasing for the city and the police pension plan is only 43% funded, which, in our view, increases the potential for further cost acceleration. The demographic trends in the area are likely to exert downward pressure on the economic base and, hence, could hurt revenue performance as the population is aging and expected to experience little growth over the medium term. We expect the city's near-term operating performance, reserves, and liquidity to remain strong to very strong and to continue to support credit quality consistent with the cu

ATI Holdings Acquisition Inc. 'B' Rating Affirmed; Outlook Negative

Bolingbrook, Ill.-based physical therapy and rehabilitation service provider ATI Holdings Acquisition Inc.'s operations have improved over the last three quarters, albeit slower than we expected because of higher-than expected-business optimization costs and expenses related to the adoption of new accounting standards. We expect receivables collections to continue to improve and now expect that the company will achieve break-even free cash flow by the end of 2019 and generate $10 million-$15 million of positive free cash flow by 2020. At the same time, we expect leverage to be about 8x by the end of 2019 and gradually decrease to the high-7x area by 2020. We are affirming our 'B' issuer credit rating on ATI. We are also affirming the 'B' and 'CCC+' issue-level ratings on the first- and second-lien debt, respectively. Our negative outlook reflects the risk that the company is unable to execute on the optimization of its platform to reduce cost

Swedish Municipality of Taby 'AAA' And 'K-1' Ratings Affirmed; Outlook Stable

Taby's high fiscal flexibility and strong financial management will allow it to maintain low debt and exceptional liquidity. We are affirming our 'AAA' global scale and 'K-1' Nordic regional scale ratings on Taby with a stable outlook. Rating Action On Sept. 6, 2019, S&P Global Ratings affirmed its 'AAA' long-term issuer credit rating on the Swedish Municipality of Taby. The outlook is stable. At the same time, we affirmed our 'K-1' Nordic regional scale rating on Taby. Outlook The stable outlook reflects our view that Taby's wealthy economy and strong management should allow it to maintain its solid budgetary performance and keep debt well below 60% of operating revenue through 2021. Downside scenario We could consider a negative rating action if we observed a significant weakening in Taby's budgetary performance, leading to higher tax-supported debt compared with our current projection. Such a scenario could be driven b

Kazakhstan 'BBB-/A-3' Ratings Affirmed; Outlook Stable

After over 30 years under a single president, Kazakhstan elected a new president in June, marking a significant step in the transfer of power. We expect a continuation of broadly stable and effective policy-making that has favored a largely prudent fiscal stance. We are therefore affirming our 'BBB-/A-3' foreign and local currency sovereign credit ratings on Kazakhstan. The outlook remains stable. Rating Action On Sept. 6, 2019, S&P Global Ratings affirmed its 'BBB-/A-3' long- and short-term foreign and local currency sovereign credit ratings on Kazakhstan. The outlook is stable. We also affirmed our 'kzAAA' national scale rating on Kazakhstan. The transfer and convertibility assessment on Kazakhstan remains 'BBB'. Outlook The outlook is stable because we expect Kazakhstan's government and external balance sheets will remain robust over the next two years. We also expect continuity of policy-making under the new President. We c