S&P cuts Hitachi hybrids to BBB-

S&P said it lowered the rating on Hitachi Capital Corp.’s deferrable subordinated debt to BBB- from BBB. S&P also affirmed its A- long-term issuer credit and senior unsecured debt ratings on Hitachi Capital.

The agency revised down the assessment of the company’s risk position and changed Hitachi Capital’s stand-alone credit profile for to bbb+ from a-, which led to the downgrade.

“The affirmation reflects our assessment that Hitachi Capital’s asset quality is slipping closer toward the average of its peers. It also reflects our assessment of the likelihood that the company would receive extraordinary support from the Hitachi group if necessary,” said S&P in a press release.

The outlook on the company is stable.

Moody’s ups Atmos, view to positive

Moody's Investors Service said it upgraded Atmos Energy Corp.'s senior unsecured rating to A1 from A2 and changed the outlook to stable from positive.

“Atmos continues to exhibit a strong set of financial credit metrics, thanks to the continued improvement in rate design that minimizes regulatory lag, a balanced financial policy to fund its capital needs and a manageable dividend policy relative to its peers,” said Robert Petrosino, a Moody’s vice president and senior analyst, in a press release.

The stable outlook mirrors Atmos’ credit supportive regulatory construct and the agency’s expectation that management will continue to employ a balanced fiscal policy that will continue to result in consistent financial performance, including CFO pre-WC to debt ratio in the mid 20% range, Moody’s said.

S&P puts DuPont de Nemours on watch

S&P said it placed the A- rating for DuPont de Nemours Inc. on CreditWatch with negative implications, reflecting the agency’s expectation that it may cut the company’s rating after it sells its nutrition and biosciences business to International Flavors & Fragrances Inc. through a Reverse Morris Trust transaction. The company expects to receive a dividend of about $7.3 billion.

DuPont plans to use about $5 billion of the proceeds to repay debt.

S&P said its view about DuPont’s rating considers the $5 billion debt repayment.

S&P shifts DXC view to negative

S&P said it revised the outlook for DXC Technology Co. to negative from stable on the company’s decision to sell three of its businesses for about $5 billion cash.

DXC plans to use the proceeds along with free cash flow to pay down debt and give $4.25 billion in shareholder remuneration over the next 10 quarters and invest in its business. The company plans to cut debt by about $2.5 billion keeping leverage at or below 2x.

“In our view, the sizable shareholder reward over the course of 10 quarters reduces the capital otherwise available to further scale digital services and position the company for future growth,” said S&P in a press release.

DXC’s BBB rating is unchanged.

S&P puts International Flavors on watch

S&P said it placed International Flavors & Fragrances Inc. and its senior unsecured ratings on CreditWatch with negative implications on the news the company is merging with Dupont Nemours’ nutrition and biosciences business in a Reverse Morris Trust transaction. The deal values the N&B business at $26.2 billion. DuPont shareholders will own 55.4% of the shares of the new company and IFF shareholders will own 44.6%.

IFF will sell $7.5 billion in debt to fund a one-time $7.3 billion special cash dividend to DuPont, resulting in pro forma 2020 debt to EBITDA just above 4x, up from the agency’s forecast of below 3.5x following the Frutarom acquisition, S&P said.

S&P sees resolving the CreditWatch by the first half of 2020 following a review of the effect of the acquisition on IFF.

DBRS assigns BBB to AltaGas notes

DBRS said it assigned a rating of BBB (low) with a stable trend to AltaGas Ltd.’s C$500 million 2.609% medium-term note offering due Dec. 16, 2022. The rating assigned to these notes is based on the rating of an already-outstanding debt series of the above-mentioned debt instrument. AltaGas intends to use the proceeds to pay down indebtedness under the company’s credit facility and for general corporate purposes.

AltaGas’ ratings reflect its diversified portfolio of regulated utilities and midstream business in the United States and Canada, DBRS said.

Moody’s revises Atrium view upwards

Moody’s Investors Service said it confirmed Atrium European Real Estate Ltd.’s Baa3 long term issuer and senior unsecured ratings and changed the outlook to positive from ratings under review.

This rating action concludes the review for downgrade initiated July 25. The review was initiated following the announcement of a possible acquisition by Gazit-Globe Ltd. (Gazit) of the about 40% share capital of Atrium that is not already owned by Gazit or its subsidiaries. On Oct. 25, the company announced that the Gazit acquisition did not receive the required level needed.

“The positive outlook reflects the company’s moderate 38.9% leverage at 30 June 2019, as measured by Moody’s-adjusted gross debt / total assets, and strong 3.8x Moody’s-adjusted fixed charge coverage. The outlook further reflects Moody’s expectation that the company will continue to generate stable cash flow, maintain good liquidity while keeping high occupancy levels and a balanced growth strategy. Continued progress on the repositioning of the portfolio including a reduction or disposal of the Russian exposure will improve portfolio quality and could lead to a higher rating,” said Moody’s in a press release.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.