S&P downgrades Euramax

Standard & Poor’s said it revised the rating on Euramax International Inc. to CCC from B.

The agency also said it lowered the rating of Euramax’s $375 million of senior notes to CCC from B-, the same level as the corporate credit rating.

The recovery rating on the senior secured debt remains at 4, indicating 30% to 50% expected default recovery.

The outlook is developing.

Euramax depends on favorable business, financial and economic conditions to meet its financial commitment on its obligations, S&P said.

In the event of adverse conditions, Euramax’s capital structure appears to be unsustainable in the long term, the agency said.

S&P lowers Select Medical view to negative

Standard & Poor’s said it affirmed Select Medical Corp.’s B+ corporate credit rating and revised the outlook to negative from stable.

Absent details on the planned funding sources, the company’s issue-level ratings and recovery ratings are unchanged at this time.

The outlook revision reflects the approaching headwinds and uncertainty from the adverse change in patient-eligibility criteria for long-term acute-care services, which went into effect in October 2015, S&P said.

The Concentra Inc. acquisition and joint venture with private equity sponsor Welsh, Carson, Anderson & Stowe XII LP provides Select with incremental diversification in the company’s core business of operating long-term acute-care facilities, the agency said.

The ratings also reflect the company’s weak business risk profile and aggressive financial risk profile, S&P said.

S&P lowers Ashtead to stable

Standard & Poor’s said it revised the outlook on Ashtead Group plc to stable from positive.

The agency also said it affirmed the BB long-term corporate credit rating.

S&P also said it raised the senior secured debt ratings on the company’s $900 million and $500 million second-lien notes to BB from BB-.

This reflects a higher recovery rating of 3 from 5, indicating 50% to 70% expected default recovery.

The outlook revision reflects expectations that Ashtead will maintain higher adjusted debt than expected due to negative free operating cash flow, S&P said.

This is partly mitigated by higher operating cash flow generation due to favorable conditions in rental equipment markets, notably in the United States, the agency said.

S&P lowers Quick to stable

Standard & Poor’s said it revised the outlook on Quick SAS to stable from positive.

The agency also said it affirmed the company’s B- long-term corporate credit rating.

S&P also said it affirmed the B rating on the €40 million super senior secured revolving credit facility. The recovery rating of 2 on this instrument is unchanged, indicating 70% to 90% expected default recovery.

The agency also said it affirmed the B- rating on Quick’s €440 million senior secured notes. The 3 recovery rating on this debt also is unchanged, indicating 50% to 70% expected default recovery.

S&P also said it affirmed the CCC rating on Quick’s €155 million junior notes. The 6 recovery rating on these notes is unchanged, indicating 0 to 10% expected default recovery.

The outlook revision reflects Quick’s highly leveraged financial risk profile, which is unlikely to strengthen to levels commensurate with higher ratings over the next 12 months, the agency said.

S&P downgrades Great Wolf

Standard & Poor’s said it lowered the corporate credit rating on Great Wolf Resorts Holdings Inc. to B from B+ and placed the rating on CreditWatch with negative implications.

The agency also said it placed the ratings on the company’s credit facility on CreditWatch with negative implications.

The downgrade reflects the announced acquisition by Centerbridge, reportedly for $1.35 billion, S&P said.

Although the capital structure has not been announced, the agency said it expects that Centerbridge will borrow to partly finance the acquisition, adding leverage to the current base-case forecast for Great Wolf.

The CreditWatch listing reflects the potential that the agency could lower the corporate credit rating one additional notch, S&P said.

S&P lowers Nortek notes to B-

Standard & Poor’s said it affirmed the B corporate credit rating on Nortek Inc.

The outlook is stable.

The agency also said it affirmed the company’s BB- rating on Nortek’s $600 million senior secured term loan. The recovery rating remains at 1, indicating 90% to 100% expected default recovery.

The agency also said it revised the recovery rating on Nortek’s $735 million 8½% unsecured notes due 2021 to 5 from 4, indicating 10% to 30% expected default recovery. As a result, S&P said it have revised the rating on the notes to B- from B.

Although the proposed transaction is neutral from a total leverage perspective, the replacement of $250 million of unsecured debt with $250 million of secured debt weighs on recovery prospects for holders of Nortek’s 8½% senior notes due 2021, the agency said.

The stable outlook reflects an opinion that Nortek will experience revenue growth of about 10% in 2015, as well as interest coverage at more than 3x, S&P said.

Moody’s lifts Nortek, notes

Moody's Investors Service said it upgraded Nortek, Inc.'s corporate family rating to B2 from B3 and probability of default rating to B2-PD from B3-PD.

These actions reflect the agency’s expectations that Nortek's operating performance will continue to improve, generating large levels of earnings and free cash flow.

In a related rating action, Moody's affirmed the Ba3 rating assigned to Nortek's senior secured term loan due 2020, which is being increased to $600 million (may be further upsized to $615 million) from $350 million, and upgraded the senior unsecured notes to B3 from Caa1.

The speculative grade liquidity rating was affirmed at SGL-2.

The outlook is stable.

The add-on term loan will have essentially the same terms and conditions as the company's existing term loan, and will rank pari passu in right of payment. Proceeds and some cash on hand will be used to redeem the $250 million 10% senior unsecured notes due 2018, at which time the rating for this debt will be withdrawn.

S&P lifts Compass Minerals view to positive

Standard & Poor’s said it revised the outlook on Compass Minerals International Inc. to positive from stable.

The agency also said it affirmed all of the company’s ratings, including its BB+ corporate credit rating.

The outlook revision reflects the company’s strengthening financial risk profile, which has benefited from solid performance in both its salt and plant nutrition business segments, S&P said.

The positive outlook reflects a view that overall operating results will continue to improve over the next year, the agency said.

S&P upgrades Kissner Milling

Standard & Poor’s said it raised the long-term corporate credit rating on Kissner Milling Co. Ltd. to B from B-.

The outlook is stable.

The agency also said it raised the rating on Kissner’s $220 million senior secured notes to B from B-. The 4 recovery rating on the notes is unchanged, reflecting 30% to 50% expected default recovery.

The upgrade is based on an expectation that Kissner’s operating performance will remain solid in the near term, owing to favorable supply-and-demand dynamics in the rock salt industry, S&P said.

Prices are expected to remain elevated in the 2015-2016 winter season because salt inventories are low, the agency said.

S&P lifts Universal Health

Standard & Poor’s said it raised the corporate credit rating on Universal Health Services Inc. to BB+ from BB.

The outlook is stable.

The upgrade reflects the company’s financial performance, which has exceeded expectations, S&P said.

The agency also said it takes into account the company’s track record of maintaining leverage below 3x.

Several years ago, the company acquired Psychiatric Solutions Inc., which raised pro forma leverage to nearly 4x, S&P said. Since then, the company has de-leveraged through a combination of growth and debt repayment, the agency said.

Leverage has declined and remained at less than 3x for seven quarters, S&P said.

The company is expected to remain acquisitive, but base-case expectation is that the company will make tuck-in acquisitions, funded primarily with free cash flow, the agency added.

The ratings also reflect the company’s exposure to reimbursement risk and some geographic concentration, S&P said.

S&P: Heinz on positive watch; Kraft on negative watch

Standard & Poor’s said it placed all of H.J. Heinz Co.’s ratings, including its BB- corporate credit rating, on CreditWatch with positive implications.

The agency also said it placed the BBB corporate credit and A-2 short-term and commercial-paper ratings on Kraft Foods Group Inc. on CreditWatch with negative implications.

Both CreditWatch listings will be resolved following a review of the financial and business impact of the announced merger of these companies,

The assessment will include the review of the companies’ capital structure and integration plan, as well as the combined company’s ability to de-leverage and improve credit protection measures, along with its future business strategies and financial policy, S&P said.

The agency said it believes the combined company will likely have a BBB- corporate credit rating due to the strength of the brand portfolio, scale of the combined company, diversity of brands and geographies and strong cash flow, the agency said.

Fitch: Heinz on positive watch

Fitch Ratings said it placed the ratings on H.J. Heinz Co. and its subsidiaries on Rating Watch positive following a definitive merger agreement with Kraft Foods Group to form the Kraft Heinz Co. in a stock-for stock transaction.

The ratings on positive watch include Heinz’s long-term issuer default rating of BB-, first-lien secured credit facilities rating of BB+, second-lien secured notes rating of BB and senior unsecured notes rating of BB-.

Also on positive watch include H.J. Heinz Holding Corp.’s long-term issuer default rating of BB-, H.J. Heinz Co.’s long-term issuer default rating of BB- and H.J. Heinz Finance Co.’s senior unsecured notes rating of BB-.

H.J. Heinz Finance UK plc’s second-lien secured notes rating of BB also was placed on positive watch.

Kraft shareholders will own 49% and Heinz shareholders, primarily 3G Capital and Berkshire Hathaway, will own 51% of the combined entity, Fitch said.

In addition, Kraft’s shareholders will receive a cash payment of $16.50 per share, or about $10 billion, funded by 3G and Berkshire, the agency said.

The combined debt levels post the merger is not expected to increase, Fitch said.

The transaction is expected to close in the second half of 2015 and is subject to approval by Kraft’s shareholders and customary regulatory approvals.

The positive reflects the projected decrease in financial leverage for the combined company versus Heinz’s total debt-to-EBITDA ratio of 6.2x on a stand-alone basis.

Fitch said it estimates that initial pro forma leverage will be in the mid-4x range based on 2014 debt of $31.3 billion and EBITDA of $6.6 billion.

The ratings incorporate significant qualitative benefits from the company’s owners, 3G and Berkshire, the agency added.

Both have significant financial strength and are proven operators, Fitch said.

Moody’s changes CHC outlook to negative

Moody's Investors Service said it affirmed all ratings of CHC Group Ltd. and its subsidiary, CHC Helicopter SA.

The ratings consist of CHC's B2 corporate family rating, B2-PD probability of default rating and SGL-3 speculative grade liquidity rating and CHC Helicopter's B1 senior secured and Caa1 senior unsecured ratings.

The outlooks were changed to negative from positive.

"We changed CHC's outlook to negative as we expect the company's cash flows will deteriorate over the next year as a result of weak oil prices," Moody's vice president and senior credit officer Darren Kirk said in a news release.

Moody’s revises KCA Deutag to stable

Moody's Investors Service said it affirmed the B3 corporate family rating and B3-PD probability of default rating of KCA Deutag Alpha Ltd.

The agency also affirmed the B3 ratings on the revolving credit facility and term loan at KCA Deutag, the senior secured notes at Globe Luxembourg SCA and the senior secured notes at KCA Deutag UK Finance plc.

The outlooks were changed to stable from positive.

Moody’s said the outlook change reflects the high level of uncertainty that currently prevails across the oil industry. In response to the sharp drop in crude oil prices, oil companies have announced substantial spending cuts and cost reduction measures, which are likely to put pressure on KCA Deutag's revenues and profitability.

S&P rates Alvogen loan B

Standard & Poor’s said it raised the corporate credit rating on Alvogen Pharma US Inc. to B from B-.

The agency also said it assigned of B to the $675 million secured term loan. The recovery rating on the term loan is 4, indicating 30% to 50% expected default recovery.

The outlook is stable.

The upgrade is based on a belief that 2014 financial performance, including leverage of less than 3x, will exceed the base-case expectation, S&P said.

The agency said it expects Alvogen’s revenue growth and margin expansion to remain higher than the initial estimates due to better-than-expected product performance, price increases and product mix.

Although the debt issuance increases pro forma leverage to about 4x, S&P said it does not expect Alvogen to tolerate leverage in excess of 5x in pursuit of additional debt-financed acquisitions to increase its scale or for shareholder-friendly actions.

S&P rates Credit Acceptance notes BB

Standard & Poor’s said it assigned a BB rating on Credit Acceptance Corp.’s proposed $250 million senior unsecured notes.

The proceeds will be used for general corporate purposes.

The notes are rated in line with the company’s BB issuer credit rating because the company’s unencumbered assets are well in excess of its unsecured debt and its secured recourse debt makes up a fairly small portion of its balance sheet, S&P said.

The ratings reflect the company’s concentration in subprime auto lending, dependence on wholesale funding markets and concentrated ownership, the agency said.

The company’s low leverage, strong profitability and well-established business model mitigate these weaknesses, S&P said.

S&P rates Monitronics loan B

Standard & Poor’s said it assigned a B rating to Monitronics International Inc.’s incremental $350 million term loan due 2022 with a recovery rating of 3.

The 3 recovery rating indicates 50% to 70% expected default recovery.

The company will use $50 million of the proceeds to pay down the outstanding balance on its revolving credit facility and the remainder will be used to repay $295 million of its existing term loan due 2018.

The company will continue to use a combination of cash flow from operations and additional debt to finance acquisitions of new subscribers from its network of third-party dealers, as well as through acquisitions of other alarm-monitoring companies, S&P said.

The corporate credit rating on Monitronics remains at B with a stable outlook, reflecting the company’s weak business risk profile and highly leveraged financial risk profile, the agency said. The ratings on the company’s existing debt also are unchanged, S&P said.

Leverage metrics remain essentially unchanged following the transaction, S&P said.

DBRS rates Reliance notes BB

DBRS said it assigned a rating of BB with a stable trend to Reliance Intermediate Holdings LP’s issuance of $375 million senior secured notes due April 1, 2023.

The notes will rank equal in right of payment with all of Reliance’s existing and future senior indebtedness, DBRS said.

The proceeds will be used to fund the purchase of any and all of the company’s outstanding 9½% senior notes due 2019 in a tender offer and to pay certain related fees and expenses, the agency said.

The company’s strong franchise has a superior business risk profile than that of traditional consumer products companies, DBRS said. As a result, it is able to manage higher leverage metrics, the agency said.

Moody’s rates Telecom Italia notes Ba1

Moody's Investors Service said it assigned a Ba1 rating to the €2 billion fixed-rate senior notes issued by Telecom Italia SpA.

The notes are senior unsecured instruments with conversion into equity features. The conversion is not mandatory and the instrument ranks pari-passu with the rest of rated debt.

The outlook is negative.

"The Ba1 rating assigned to the notes is in line with Telecom Italia's Ba1 corporate family rating, which reflects uncertainty regarding the company's ability to fully and expeditiously execute its strategy, including strengthening its balance sheet sufficiently to reverse the declining, albeit slowly improving, trend in domestic revenue and EBITDA," Carlos Winzer, Moody’s senior vice president and lead analyst for Telecom Italia, said in a news release.

Moody’s applies B1 to Outfront note add-on

Moody's Investors Service sad it assigned a B1 rating to a subsidiary of Outfront Media Inc.'s proposed $100 million add-on to the 5 5/8% senior unsecured notes due 2024.

The existing Ba3 corporate family rating, Ba1 rated senior secured credit facility and B1 rated senior unsecured notes due 2022, 2024 and 2025 remain unchanged.

The outlook remains stable.

Proceeds will be used to repay a $50 million draw on the revolver and to add cash to the balance sheet.

Moody’s said the $100 million add on increases total leverage to 5.6 times from 5.5 times as of Q4 2014 pro-forma for the Van Wagner acquisition including the agency’s standard adjustment for lease expense or to 5.2 times from 5 times, excluding its standard lease adjustments.

S&P: Outfront Media unaffected by add-on

Standard & Poor’s said the BB- rating and 4 recovery rating on Outfront Media Inc.’s senior unsecured notes due 2024 are not affected by the company’s proposed $100 million add-on.

The 4 recovery rating indicates 30% to 50% expected default recovery.

Outfront Media’s wholly owned subsidiaries, Outfront Media Capital LLC and Outfront Media Capital Corp. are co-borrowers of this debt.

With this additional debt issuance, the agency said it expects that Outfront Media’s pro forma adjusted leverage will increase to about 4.8x from 4.6x as of Dec. 31, 2014.

The company intends to use $50 million of the net proceeds to repay revolver borrowings with the remainder for general corporate purposes, the agency said.

The ratings reflect Outfront Media’s satisfactory business risk profile because of its strong position in large- and midsize-outdoor advertising markets, S&P said.

The ratings also consider the moderate structural pressure it faces compared with other media companies due to less competition from online advertising, the agency said.

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