S&P lowers MEIF 5 Arena

S&P said it lowered its ratings for MEIF 5 Arena Holdings and its senior secured notes to B+ from BB-.

“Generating about 70% and 25% of its gross margin in Spain and Portugal, respectively, on a normalized 2019 basis, MEIF 5's cash flow recovery is closely linked with the consumer behaviors in these countries. Following the financial crisis of 2008, we saw a slower increase in traffic levels for car parks and toll roads in this region compared with other Western European countries,” the agency said. The agency estimates the post-pandemic recovery in these countries will be slower, too.

S&P said it projects MEIF 5's adjusted debt to EBITDA to stay above 8x until 2023 at the earliest. “Under our current base case, we forecast adjusted debt to EBITDA will be close to 13x in 2021, down from 16.7x in 2020 and compared to our previous forecast of 9x, decreasing to 8.5x in 2022-2023.”

The outlook is stable.

Fitch ups Alcoa Nederland revolver

Fitch Ratings said it upgraded Alcoa Nederland Holding BV's $1.5 billion, senior secured revolving credit facility to BBB-/RR2 from BB+/RR4 and removed the rating from under criteria observation.

The agency also removed Alcoa Nederland's BB+ long-term issuer default rating and BB+/RR4 senior unsecured ratings from UCO.

“The upgrade of the senior secured instruments reflects Fitch's application of the agency's updated corporates recovery ratings and instrument ratings criteria. The ratings were placed on UCO following the publication of the updated criteria on April 9, 2021,” the agency said in a press release.

S&P raises EQT

S&P said it raised EQT Corp.’s issuer and issue-level ratings to BB+ from BB, following the completion of its acquisition of Alta Resources Development LLC's upstream and midstream subsidiaries for about $2.95 billion.

“The acquisition of Alta further enhances EQT's scale and improves its diversification within the Marcellus Shale. We expect EQT's production to increase to about 5.6 billion cubic feet equivalent per day in 2022 with the acquisition of Alta. Additionally, we expect the acquisition to increase EQT's already large reserve base and further strengthen EQT's position as the largest producer in the Marcellus Shale,” the agency said in a press release.

Given revised prices for Henry Hub natural gas prices for 2021 and 2022, S&P said it forecasts EQT’s funds from operations to debt to average about 40% for 2021, increasing to 50%-55% in 2022 and debt to EBITDA to average 2x-2.5x in 2021 and improve to 1.5x-2x in 2022.

The outlook is positive.

S&P upgrades Novelis

S&P said it upgraded its ratings on Novelis Inc. and its notes to BB from BB-. The notes’ 4 recovery rating is unchanged.

“Novelis' operating results and credit measures were stronger than our expectations in fiscal 2021, and we expect continued improvement this year. Our upgrade of Novelis primarily reflects our expectation that the company will maintain credit measures we view as commensurate for the rating in the next several years,” S&P said in a press release.

The agency said it forecasts Novelis will deliver an adjusted debt-to-EBITDA ratio of about 3x in fiscal 2022, and modestly lower in the following year. Free operating cash flow to debt is projected to be just over 10% over the next two years.

The outlook is stable.

Moody's upgrades Ontic

Moody's Investors Service said it upgraded the corporate family rating of Bleriot Midco Ltd. (Ontic) to B2 from B3, and raised the company's probability of default rating to B2-PD from B3-PD. Concurrently the agency affirmed the B2 ratings of the outstanding $548 million backed senior secured first-lien term loan due 2026, to be upsized to $688 million, and the $85 million backed senior secured first-lien revolving credit facility due 2024, both issued by Bleriot US Bidco, Inc.

“Ontic has performed well since closing its leveraged buy-out in October 2019. It has increased its exposure to military platforms to 70% of 2020 revenues, from 57% in 2018, weathered the adverse effects of the coronavirus pandemic on its commercial platforms, and generated double-digit organic revenue growth. The company has also carried out acquisitions of new licenses which have been funded largely through cash generation. As a result, leverage has reduced to 5.8x (Moody's-adjusted, pro forma for the refinancing) as at March 2021, compared to 7.5x at the time of the LBO,” Moody’s said in a press release.

Ontic will use the $140 million in proceeds and cash, to prepay in full the $175 million backed senior secured second-lien term loan due 2027 issued by Bleriot US Bidco. The agency will withdraw the Caa2 rating of this instrument upon its repayment.

The outlook is stable.

S&P raises Ontic

S&P said it raised its ratings for Bleriot Midco Ltd. (Ontic) and its first-lien credit facilities to B from B-., citing its 19% increase in 2020 revenue and new loan to lower interest costs. The recovery rating is 4.

Ontic is securing an incremental $140 million first-lien loan at an interest margin of 4%, on top of the $548 million already outstanding. It is using the proceeds and $35 million balance sheet cash to pay down its $175 million second-lien term loan, which bears an interest margin of 8.5%. Ontic expects to save around $9 million of cash interest per year.

“The increased EBITDA generation and improving margins support reducing the group's leverage. We expect debt/EBITDA to improve to about 11x-12x in 2021 and 2022 (including shareholder loans). Excluding shareholder loans, we expect leverage of around 5.1x-5.4x in 2021, and below 5x in 2022. Combined with the reduced interest costs over the next couple of years from the refinancing, we anticipate that FFO cash interest coverage will rise to about 2.7x-3x in 2021, and to above 3x in 2022,” the agency said in a press release.

The outlook is stable.

Moody's upgrades Radiology Partners

Moody's Investors Service said it raised Radiology Partners, Inc.'s ratings, including corporate family rating to B3 from Caa1, probability of default rating to B3-PD from Caa1-PD, first-lien senior secured rating to B2 from B3 and rating on the company's senior unsecured notes to Caa2 from Caa3. The outlook was changed to stable from positive.

“The upgrade of Radiology Partners' ratings reflects a significant recovery in patient volumes in recent months following very steep declines in the second quarter of 2020 triggered by the coronavirus pandemic. The upgrade also reflects the company's materially expanded scale and geographic diversity after completing the acquisition of the radiology business from Mednax, Inc.,” Moody’s said in a press release.

The stable outlook reflects an expectation Radiology Partners will gradually lower its leverage and strengthen its cash flow. “It also reflects an expectation that the company will be less aggressive with its acquisition-led growth strategy going forward,” the agency said.

S&P changes Symplr view to negative

S&P said it changed Symplr Software Intermediate Holdings Inc.’s outlook to negative from stable but affirmed its B- issuer rating and the B rating on its first-lien debt. The first-lien loan’s 2 recovery rating is unchanged.

The outlook and affirmation follow Symplr’s acquisition of HealthcareSource HR Inc. with $1.275 billion of loans plus equity, the agency said.

“We view the HealthcareSource acquisition as increasing adjusted debt leverage, making near-term cash flows less predictable, and showing a willingness for the company to pursue debt-funded inorganic growth. Although we continue to expect positive cash flow generation in 2021, we expect cash flows to be less predictable over the near term as the company integrates all recent acquisitions, including TractManager, Phynd, and now HealthcareSource,” S&P said in a press release.

The outlook reflects the higher leverage and expectation for pro forma adjusted debt to EBITDA in the 11x-12x range, the possibility for more acquisitions and free cash flows that are still relatively modest.

Moody's moves McAfee view to stable

Moody's Investors Service said it affirmed the B3 corporate family rating and B3-PD probability of default rating for Magenta Buyer LLC (McAfee Enterprise) and changed the outlook to stable from positive.

Moody's also affirmed the B2 rating to the upsized first-lien term loan and Caa2 rating to the upsized second-lien term loan.

“The outlook revision to stable from positive reflects McAfee Enterprise's high leverage and aggressive financial policy as evidenced with the FireEye acquisition while also restructuring operations and separating as a stand-alone company. The high leverage limits McAfee Enterprise's financial flexibility, which magnifies the impact of any performance deterioration or integration execution errors,” the agency said in a press release.

Moody's revises POWDR view to stable

Moody's Investors Service said it changed the outlook for POWDR Corp. to stable from negative. The agency also affirmed the company’s ratings, including its B2 corporate family rating and B2-PD probability of default rating, as well as the B1 rating for the company's $300 million senior secured notes due 2025.

“The revision of the outlook to stable and rating affirmations reflect Moody's expectation that POWDR's earnings will recover in FY22, and that debt-to-EBITDA leverage will decline from its current level of about 11x (for the LTM period ended March 2021) to the low 8x at end of FY21 (ending September 2021) and below 6.5x by the end of FY22 (end September 30, 2022). Moody's expects the upcoming 2021-2022 ski season will see visitation and other on-mountain activities largely normalize back to FY19 (pre-pandemic) levels as the coronavirus pandemic subsides and travel and capacity restraints are lifted or meaningfully eased,” the agency said in a press release.

Fitch rates Ideal Standard International B-

Fitch Ratings said it assigned Ideal Standard International SA an expected long-term issuer default rating of B-. The agency also gave the company’s new €350 million of senior secured notes an expected rating of B- with an RR4 recovery rating.

“IS' business model remains sustainable, supported by strong brand recognition, good market positions in selected building product segments with a high exposure to more stable renovation works (around 80% of sales in 2020), good diversification across residential, public and commercial end-user segments as well as fairly broad coverage across Europe, its main market,” Fitch said in a press release

However, Ideal has high leverage, weak free cash flow generation and is smaller than its peers. “The cash flow profile has been under pressure from high restructuring costs and working-capital volatility in recent years. We, however, expect these to decrease over the four-year rating horizon and, together with the well-advanced restructuring initiatives, lead to meaningful profitability improvements,” the agency said.

The outlook is stable.

Moody's assigns International SOS Ba3

Moody's Investors Service said it gave a Ba3 corporate family rating and a Ba3-PD probability of default rating to AEA International Holdings (Luxembourg) Sarl, which is the intermediate holding company for International SOS.

Moody's assigned Ba3 instrument ratings to the planned $700 million backed senior secured first-lien term loan to be issued by AEA International Holdings (Luxembourg) and to the proposed backed senior secured first-lien revolving credit facility of up to $100 million to be borrowed by subsidiary company AEA International Holdings Pte. Ltd.

“The Ba3 CFR reflects: (1) the company's strong and differentiated market position as the only global integrated supplier of assistance and medical services; (2) good revenue visibility supported by subscriptions, medium term contracts, high retention rates and stable associated supplies demand; (3) strong historic track record and growth prospects, driven by increasing focus on employers' duty of care, employee safety and wellbeing and business continuity; (4) a conservative financial policy with moderately low leverage of 4.3x (Moody's-adjusted),” the agency said in a press release.

The proceeds will be used to repay $619 million of debt, acquire an associate company, pay transaction costs and boost balance sheet cash.

The outlook is stable.

S&P rates ISOS, facility BB

S&P said it assigned BB ratings to AEA Holdings (Luxembourg) Sarl (International SOS) and its planned $700 million senior secured term loan maturing in 2028, and proposed $80 million senior secured revolving credit facility. The recovery rating is 3, indicating an expectation of meaningful recovery (rounded estimate: 65%) in default.

“ISOS has a strong market position in a niche market, long-term contracts, and high customer retention rates, leading to high recurring revenue. ISOS benefits from stable demand for its medical services (about 72% of sales). Contracts in this segment are typically long term, for periods of between two and eight years, and provide high revenue visibility,” the agency said in a press release.

ISOS will use the facility to repay $619 million of debt, transaction fees of about $28 million, purchase minority interests of about $15 million and prefund tax liabilities of about $8 million.

S&P said it forecasts adjusted debt to EBITDA of about 3.8x and FFO to debt of 20% at end-FY2022, following the refinancing transaction.

“Thereafter, we expect gradual improvement in credit measures, with adjusted leverage approaching 3.5x and FFO to debt of about 20% on the back of strong organic growth, and S&P Global Ratings' EBITDA margins of about 12%,” the agency said.

The outlook is stable.

S&P rates Sweetwater Borrower, loan B

S&P said it assigned B ratings to Sweetwater Borrower LLC and its planned $638.5 million senior secured term loan due in 2028.

The proceeds will be used to partially fund the acquisition of Sweetwater by Providence Equity Partners.

“We expect Sweetwater's leverage will be elevated after the transaction, with modest improvement this year because of earnings growth. We project Sweetwater's S&P Global Ratings-adjusted leverage in the mid-6x area in 2021, declining to the low-6x area in 2022. We anticipate the company will improve its operating performance over the next 12 months, supported by modest growth in its customer base. We believe this will help lead to a low double-digit increase in sales for 2021, following approximately 40% revenue growth in 2020,” S&P said in a press release.

The outlook is stable.

Moody's assigns Sweetwater, loan B2

Moody's Investors Service assigned first-time ratings to Sweetwater Borrower, LLC (Symphony Finance Sub, LLC), including a B2 corporate family rating, B2-PD probability of default rating and B2 ratings on the planned senior secured first-lien revolving credit facility and planned term loan.

"Sweetwater has gained share in the musical retail sector by capitalizing on growing e-commerce penetration and differentiating itself with a high level of service and a personalized selling model," said Moody's analyst Raya Sokolyanska. "While leverage is high pro forma for the investment, we expect the company's good execution capabilities to continue driving solid long-term earnings performance." The rating also considers governance considerations, including risks associated with private equity control.

Proceeds from the $638.5 million term loan, $15 million of borrowings from the $100 million revolver, equity from Providence Equity Partners and rollover equity from the company's founder will be used to finance the investment by Providence Equity Partners and pay for transaction fees and expenses.

The outlook is stable.

Moody’s rates Veritext loans B2, Caa2

Moody's assigned B2 ratings to VT Topco, Inc.’s (Veritext) planned $400 million incremental first-lien senior secured term loan, the company's proposed $70 million first-lien senior secured delayed-draw term loan, the company's $55 million senior secured first-lien revolver which is being extended to 2025 and a Caa2 rating to the company's planned $200 million incremental senior secured second-lien term loan.

Moody’s also affirmed Veritext’s B3 corporate family rating, B3-PD probability of default rating, the B2 rating on the outstanding first-lien senior secured credit facility, and the Caa2 rating on the existing second-lien senior secured term loan.

Term loan proceeds and cash will be used to fund a $555 million dividend payment, pay down the revolver balance and pay transaction fees and expenses.

The delayed-draw term loan availability expires in 24 months. Its proceeds can be used to finance one or more permitted investments, to finance earn-outs related to permitted investments, and to repay revolving loans that were used to fund permitted acquisitions or earn-outs. The company is also extending the maturity of its revolver to 2025.

The outlook is stable.

Moody's eyes Chobani for upgrade

Moody's Investors Service said it placed Chobani, LLC's ratings on review for upgrade after the company reported it filed to conduct an IPO.

The ratings on review, include the B3 corporate family rating and B3-PD probability of default rating. All other ratings are unchanged, including the B1 rating on the company's senior secured first-lien bank credit facility, the B1 rating on the senior secured notes and the senior unsecured notes’ Caa2 rating.

“Chobani's existing debt ratings are unchanged because the ultimate capital structure post-IPO is uncertain. However, the company's debt ratings could change depending on the CFR and actual post-IPO debt mix in the capital structure,” Moody’s said in a press release.

The review will focus on Chobani's financial leverage after the IPO, financial policies as a public company, debt mix and operating strategy, the agency said.

Moody's stabilizes Ineos Quattro view

Moody's Investors Service said it changed the outlook to stable from negative for Ineos Quattro Holdings Ltd. and its subsidiaries.

Concurrently, Moody’s affirmed Ineos Quattro’s Ba3 corporate family rating, its Ba3-PD probability of default rating, along with Ba3 instrument ratings of its guaranteed senior secured bank credit facilities issued by its subsidiaries Ineos Quattro Holdings UK Ltd. and Ineos US Petrochem LLC, guaranteed senior secured notes issued by its subsidiary Ineos Quattro Finance 2 plc and senior secured bank credit facilities and senior secured notes issued by its subsidiaries Ineos Styrolution Group GmbH and Ineos Styrolution US Holding LLC.

The agency also affirmed a B2 rating of its guaranteed senior unsecured notes issued by Ineos Quattro Finance 1 plc.

“Today's action reflects meaningful improvement in Ineos Quattro's year-over-year performance in the first quarter of 2021: 8% rise in revenues and over 2x increase in EBITDA underpinned by broader economic recovery from the pandemic, particularly in the styrene, ABS and PVC segments which led to record performance of Styrolution and Inovyn businesses. As a result of this cyclical improvement in the markets, Ineos Quattro's credit profile strengthened significantly with leverage reducing from 5.2x in 2020 to 4.1x in the last 12 months to March 2021 and projected to reduce further to below 4x.

S&P raises LyondellBasell

S&P said it raised the ratings for LyondellBasell Industries NV and its senior unsecured notes to BBB from BBB-.

“The upgrade reflects our expectation for a significant improvement in operating performance in 2021. We believe a much faster-than-expected rebound in the global economy will enable LyondellBasell to generate significantly stronger EBITDA and credit measures than we were previously expecting.

The agency said it forecasts the company's EBITDA will top $4 billion in the first half of 2021, and projects 2021 may be a record year from an EBITDA perspective.

The outlook is stable.

Fitch moves Marathon view to positive

Fitch Ratings said it affirmed Marathon Oil Corp.'s (MRO) long-term issuer default rating and senior unsecured debt ratings at BBB- but revised the outlook to positive from stable.

“The main driver of the positive outlook is the company's accelerated debt repayment plans, which include the prepayment of $500 million in remaining 2022 notes in 2Q21 and at least $500 million additional debt repayments in 2021, which contribute to a sub-2x leverage profile. Other favorable rating considerations include MRO's robust FCF and above average portfolio diversification,” Fitch said in a press release.

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