Fitch lifts CenterPoint Energy

Fitch Ratings said it upgraded CenterPoint Energy Resources Corp.'s long-term issuer default rating to BBB+ from BBB and revised the outlook to stable from positive

The agency also affirmed the long-term issuer default ratings of CenterPoint Energy Corp. at BBB and CenterPoint Energy Houston Electric at A-.

Fitch said the actions follow CenterPoint’s announcement on Sept. 4 that it had completed the internal spin of its investment in Enable Midstream Partners, LP (BBB-/stable) and Enable GP, LLC from CenterPoint Energy Corp. to CenterPoint Energy Midstream Inc.

The agency said that post-spin, it expects CenterPoint’s operating risk to be between that of NiSource Inc. (BBB/stable) and Southern Co. Gas (BBB+).

“CERC's natural gas distribution operations enjoy geographic diversification and supportive regulations, similar to NI and GAS' regulated business,” the agency said.

S&P lowers San Diego Gas

S&P said it lowered its issuer credit rating on San Diego Gas & Electric Co. to A- from A. The outlook is negative.

At the same time, S&P lowered the ratings on the company's unsecured debt to A- from A, the first-mortgage bonds to A from A+ and the short-term debt to A-2 from A-1. In addition, S&P lowered the rating on the company's preferred stock to BBB from BBB+.

“The downgrade reflects the unaddressed longer-term risks associated with inverse condemnation. Although the California Legislature's approval of SB 901 addresses many of the near-term risks associated with wildfire costs borne by utilities, it does not deal with the longer-term issue of inverse condemnation,” S&P said in a news release.

S&P drops Hercules Capital to junk

S&P said it lowered its issuer credit rating on Hercules Capital Inc. to BB+ from BBB-. The outlook is stable.

At the same time, S&P also lowered the senior unsecured debt rating to BB+ from BBB-.

Hercules Capital's board of directors voted to approve the adoption of the modified asset coverage with regard to business development companies (BDCs) through the newly passed Small Business Credit Availability Act. The company's applicable asset coverage ratio will decline to 150% from 200% one year from the date of the approval, which effectively increases its maximum allowed debt-to-equity ratio to approximately 2:1 from 1:1.

Moody’s rates Halfmoon notes Baa1, on review

Moody's Investors Service said it assigned a Baa1 senior unsecured debt rating to Halfmoon Parent, Inc.'s proposed $23.5 billion senior unsecured notes.

Halfmoon is a wholly owned subsidiary of Cigna Corp. (Baa1) and was formed as a merger subsidiary related to the pending acquisition of Express Scripts Holding Co. (Baa2).

The rating on the notes, consistent with Cigna's ratings, is on review for downgrade until the deal closes, Moody’s said.

The net proceeds of the proposed issuance will be used to fund a portion of the cash consideration to acquire Express Scripts.

The agency said the review for downgrade reflects the significant increase in Cigna's financial leverage and decrease in overall financial flexibility that will result from its acquisition of Express Scripts.

Fitch rates AEP Transmission notes A-

Fitch Ratings said it assigned an A- rating to AEP Transmission Co. LLC's $325 million series J senior notes due 2048.

The notes are unsecured and unsubordinated obligations of the company.

Proceeds will be used for general corporate purposes including capex and repayment of advances from affiliates.

AEP’s long-term issuer default rating is BBB+ and its outlook is stable.

The agency said the ratings reflect the expected increase in leverage in the early years of the forecast period owing to the impact of the loss of bonus depreciation on near-term cash flows and the large capex budget.

Offsetting the initial high leverage is the stable and predictable nature of its transmission cash flows, Fitch said.

Fitch rates Archer Daniels notes A

Fitch Ratings said it assigned an A rating to Archer Daniels Midland Co.'s euro-denominated benchmark-size seven-year senior notes.

The company intends to use the net proceeds from the notes for general corporate purposes, including to repay a portion of outstanding commercial paper.

The outlook is stable.

The agency said Archer Daniels’ diverse operations geographically, logistically and across most key commodities offer material protection from volume fluctuations from changing demand dynamics or supply disruption of any specific marketplace or product.

The company has leading positions in corn and oilseeds processing combined with an extensive agricultural services trading business focusing on merchandising and handling, transportation and milling, Fitch added.

Moody’s rates Archer Daniels notes A2

Moody's Investors Service said it assigned an A2 rating to Archer Daniels Midland Co.'s proposed issuance of senior unsecured euro notes due 2025.

Proceeds from the notes will be used for general corporate purposes.

The outlook is stable.

"In July, ADM announced the potential acquisition of Neovia for €1.5 billion. In my opinion, it is likely that some of the proceeds from these notes will be used to fund that transaction when it closes in the fourth quarter of 2018 or the first quarter of 2019," John Rogers, senior vice president at Moody's and lead analyst on Archer Daniels, said in a news release.

Fitch rates Pfizer notes A+

Fitch Ratings said it assigned an A+ rating to Pfizer Inc.'s senior unsecured note offering.

The company intends to use the net proceeds of the issuance for general corporate purposes including the refinancing of outstanding debt.

The agency said that Pfizer's A+ rating reflects the favorable aspects of the company's operating profile relative to innovative pharmaceutical industry peers Eli Lilly and Bristol Myers in terms of scale, breadth, depth, geographic reach and patent risk.

Pfizer's intermediate-term patent risk in terms of sales at risk is relatively benign and an advancing pipeline will offset some sales losses, supporting the prospects for operational and financial stability, Fitch said.

Moody’s rates Wendel Baa2

Moody's Investors Service said it assigned a long-term issuer rating of Baa2 to Wendel SE, the parent company of the Wendel group.

The agency also assigned a P-2 short term issuer rating to Wendel.

The outlook is stable.

Moody’s said the issuer rating reflects the company's consistent and prudent investment strategy as well as its conservative financial policy as exemplified by a very low point-in-time market value leverage and a commitment to maintain a low market value leverage through market cycles.

S&P rates Willis Towers Watson notes BBB

S&P said it assigned its BBB debt rating to Willis Towers Watson plc’s proposed $1 billion senior unsecured notes.

According to the company, the notes will be split in two tranches, with a $600 million tranche maturing in 2028 and a $400 million tranche maturing in 2048. Both notes will be issued from Willis North America Inc. and will be guaranteed by Willis Towers Watson and its other guarantor subsidiaries.

Willis Towers Watson will use the proceeds of the offering partially to pay down the outstanding balance on its $1.25 billion revolving credit facility (which had $1.085 billion outstanding as of June 30, 2018), as well as the remaining $127 million on its term loan due in 2019, and for general corporate purposes.

“Our BBB long-term issuer credit rating on WLTW reflects the company's strong business risk profile and significant financial risk profile,” S&P said in a news release.

Fitch gives AllianzGI preferreds AAA

Fitch Ratings said it assigned a long-term rating of AAA to the $109 million series A cumulative preferred shares issued by AllianzGI Convertible & Income Fund II.

The agency said the rating reflects sufficient asset coverage provided to the cumulative preferred shares as calculated per the fund's governing documents, the structural protections afforded by mandatory cure and de-leveraging provisions in the event of asset coverage declines, the legal and regulatory parameters that govern the fund's operations and the capabilities of Allianz Global Investors U.S. LLC as investment manager.

Fitch said the issuance of the shares does not impact the outstanding rating of AllianzGI’s auction-rate preferred shares.

S&P assigns BBB to GM notes

S&P said it assigned its BBB issue-level rating to General Motors Co.'s proposed unsecured notes.

“We expect the company to use the net proceeds from the sale of the notes to refinance the October 2018 maturing debt (3.5%, $1.5 billion senior unsecured notes), pre-fund certain mandatory contributions for its U.K. and Canada pension plans (approximately $600 million) due in 2019 through 2021, and for other general corporate purposes,” S&P said in a news release.

“We expect the transaction to be roughly neutral for GM's credit metrics and its operating performance should support a ratio of free cash flow-to-debt of at least 15%-25% over the next two years.”

Fitch gives General Motors notes BBB

Fitch Ratings said it assigned a rating of BBB to General Motors Co.'s proposed issuance of senior unsecured notes.

The notes will be issued in three tranches with floating-rate senior unsecured notes due 2021 and fixed-rate senior unsecured notes due 2028 and 2049.

The company’s long-term issuer default rating is BBB and its outlook is stable.

General Motors intends to use the proceeds from the proposed notes to repay $1.5 billion of 3.5% senior unsecured notes that mature in October, to prefund about $600 million in some mandatory contributions to the company's pension plans in the United Kingdom and Canada that are due in 2019 through 2021, and for other general corporate purposes.

The agency said that although the total size of the offering could slightly increase Fitch's calculation of the company’s automotive leverage, Fitch does not expect the effect on the company's credit profile to be significant.

Fitch gives MUFG notes A

Fitch Ratings said it assigned Mitsubishi UFJ Financial Group, Inc.'s (A/stable) $1 billion senior unsecured notes a rating of A.

The agency also affirmed the A rating on the $3.8 billion senior unsecured notes due 2023, which have been increased from $1.8 billion.

The notes are likely to be issued and upsized on Sept. 11 and MUFG expects them to count towards its total loss-absorbing capacity requirements, which come into effect at end-March 2019, as they will be structurally subordinated to the liabilities of MUFG's subsidiaries.

The rating on the notes is aligned with MUFG's long-term issuer default rating, which reflects the banking group's strong and sound domestic franchise, solid liquidity profile in yen, sound asset quality, adequate capital position and modest profitability, Fitch said.

Fitch gives Rothesay notes BBB-

Fitch Ratings said it assigned Rothesay Life plc's (A/stable) proposed restricted tier 1 subordinated notes a BBB- expected rating.

The proposed notes are rated four notches below Rothesay's issuer default rating, comprising two notches for expected recovery and two notches for moderate non-performance risk, in line with Fitch's notching criteria, the agency said.

Proceeds will be used for general corporate purposes and to partially repay bank debt raised in March, which funded a £12 billion purchase of annuities from Prudential plc (A/stable).

“The proposed notes will rank in priority to ordinary shares in the event of winding-up, but behind senior creditors, which are defined as including solvency II tier 2 and tier 3 subordinated debt,” Fitch said in a news release.

“The level of subordination results in our baseline recovery assumption of poor. We therefore notch down twice from the IDR for recovery.”

S&P rates Brighthouse Financial debentures BBB-

S&P said it assigned its BBB- debt rating to Brighthouse Financial's (BHF) proposed fixed-rate retail junior subordinated debentures due 2058.

Excluding the occurrence of a tax, rating agency, or regulatory capital event (as defined in the issuing prospectus supplement), the company can redeem these subordinated notes, in whole or in part, on or after September 2023 at their principal amount plus accrued and unpaid interest.

“Our assigned issue rating of BBB- is two notches below our BBB+ long-term issuer credit rating on BHF's holding company. This notching reflects the subordination and optional deferability of these debentures,” S&P said in a news release.

Moody’s rates Brighthouse debt Ba1(hyb)

Moody's Investors Service said it affirmed the existing ratings of Brighthouse Financial, Inc. and its subsidiaries and assigned a Ba1(hyb) rating to the anticipated issuance of more than $200 million of junior subordinated debt maturing in 2058.

Proceeds from the offering are expected to be used for general corporate purposes.

The outlook is stable.

The agency said the affirmation is based on the company's solid asset quality, with modest amount of exposure to high-risk assets, namely below-investment grade securities and alternative investments.

The agency said that in addition to issuing the junior subordinated debt, which will receive partial equity credit according to Moody's methodology, Brighthouse recently announced plans to initiate a share repurchase plan, a credit negative.

However, on the positive side, the company has better visibility into the direction of NAIC VA capital reform, removing the uncertainty of how the changes would affect its capital position, Moody’s said.

Fitch rates Brighthouse debentures BB+

Fitch Ratings said it assigned a BB+ rating to Brighthouse Financial, Inc.'s upcoming issuance of junior subordinated debentures.

The debentures mature in 40 years.

Existing ratings assigned to Brighthouse and its affiliates are unaffected.

The agency said the debentures are rated three notches below Brighthouse's long-term issuer default rating, which reflects Fitch's assumption of poor recovery prospects in the event of default given the level of subordination and one additional notch for minimal non-performance risk.

S&P rates Voya Financial preferreds BB+

S&P said it assigned its BB+ debt rating to Voya Financial Inc.'s proposed issuance of fixed-rate reset noncumulative preferred stock.

S&P rates the preferred stock issue two notches below the BBB long-term issuer credit ratings on VOYA, reflecting the subordination of the issue and the optional deferability of the subordinated debt.

“We expect financial leverage of about 35% in 2018 and 2019, taking into account the decline in VOYA's shareholders' equity from the June 2018 sale of its closed-block variable annuity business,” S&P said in a news release.

Fitch changes view on Italian banks

Fitch Ratings said it revised the outlooks on UniCredit SpA's, Intesa Sanpaolo's, Mediobanca SpA's and Credito Emiliano's BBB long-term issuer default ratings to negative from stable.

The outlook on Banca Nazionale del Lavoro's BBB+ long-term issuer default ratings was revised to negative from stable.

The banks' long- and short-term issuer default ratings were affirmed.

The agency said the action follows the revision of Italy's outlook to negative.

Fitch said it views that the banks would likely be downgraded if Italy's rating is downgraded.

Fitch affirms Council of Europe

Fitch Ratings said it affirmed Council of Europe Development Bank's long-term issuer default rating at AA+ with a stable outlook.

The short-term issuer default rating was affirmed at F1+.

“CEB's ratings are driven by its intrinsic credit quality and reflect its strong solvency (assessed at aa-), its excellent liquidity (assessed at aaa) and its low-risk business environment, which provides an uplift of two notches to the lower of its solvency and liquidity assessments (aa-), resulting in an intrinsic rating of aa+,” the agency said in a news release.

“The solvency assessment of aa- is driven by CEB's very low risk profile, notably the excellent performance of its loan book, with no loan impairments in recent years.”

Fitch affirms Deutsche Post

Fitch Ratings said it affirmed Deutsche Post AG's long-term issuer default rating and senior unsecured rating at BBB+ and short-term issuer default rating at F2.

The outlook is stable.

Deutsche Post Finance BV's senior unsecured rating was affirmed at BBB+.

“The ratings reflect DP's global scale, market leadership in the areas of its operation and balanced business risk profile between high-growth parcel and express businesses, fueled by ecommerce, and contracted supply chain operations as well as structural decline in the conventional mail and highly cyclical global forwarding, freight (GFF) business,” the agency said in a news release.

S&P affirms Edison International

S&P said it affirmed its BBB+ issuer credit ratings on Edison International and subsidiary Southern California Edison Co. The outlooks remain negative.

At the same time, S&P affirmed the BBB senior unsecured debt rating at Edison International, the BBB+ senior unsecured debt rating at subsidiary Southern California Edison, the BBB- rating on Southern California Edison's preferred stock and the A ratings on Southern California Edison's secured debt.

S&P also affirmed the short-term A-2 ratings at Edison International and Southern California Edison Co.

“The ratings affirmation follows the California State Legislature's approval of Senate Bill 901 (SB 901) and our high degree of confidence that the bill will be enacted into law. In our view, the bill's provisions are designed to protect credit quality and to limit the wildfire risks to California's regulated electric utilities,” S&P said in a news release.

DBRS confirms George Weston

DBRS said it confirmed the issuer rating and notes & debentures rating of George Weston Ltd. at BBB as well as its short-term issuer rating at R-2 (high) and its preferred shares rating at Pfd-3. All trends are stable.

DBRS notes that it has concurrently confirmed the ratings of Loblaw Cos. Ltd. at BBB with a stable trend and Choice Properties Real Estate Investment Trust (CPREIT) at BBB with a stable trend.

The confirmation of the ratings follows the announced reorganization by Loblaw and George Weston, under which Loblaw will spin out its 61.6% interest in CPREIT. Loblaw shareholders (excluding George Weston) will receive 0.135 of a George Weston common share for every Loblaw share, which is equivalent to the market value of their pro-rata interest in Choice Properties.

DBRS noted that any potential future rating upgrade to BBB (high) on Loblaw or Choice Properties will not likely result in a corresponding rating action on George Weston’s ratings.

S&P affirms George Weston

S&P said it affirmed its BBB issuer credit rating on George Weston Ltd., parent company of Loblaw Cos. Ltd.

S&P also affirmed its BBB issue-level ratings on the company's unsecured debt, and its BB+ global scale and P-3 (High) Canada scale ratings on the company's preferred stock.

“We base the affirmation on our assessment of GWL's group credit profile (GCP) at bbb, which is unchanged pro forma the transaction,” S&P said in a news release.

S&P affirms PG&E

S&P said it affirmed its BBB issuer credit ratings on PG&E Corp. and subsidiary Pacific Gas and Electric Co. (PacGas) and removed the ratings from CreditWatch, where they were placed with negative implications on Dec. 22, 2017.

The outlook on both entities is negative.

At the same time, S&P affirmed the BBB unsecured debt rating at subsidiary PacGas, and removed rating from CreditWatch, where they were placed with negative implications on Dec. 22, 2017.

S&P also affirmed the A-2 short-term rating on PG&E Corp. and PacGas and removed the ratings from CreditWatch, where they were placed with negative implications on Dec. 22, 2017.

The CCC+ rating on the preferred stock at PacGas remains on CreditWatch with negative implications.

“The ratings affirmation follows the California State Legislature's approval of SB 901 and indicates our high degree of confidence that the bill will be enacted into law. In our view, the bill provisions are designed to protect credit quality and to limit the wildfire risks to California's regulated electric utilities,” S&P said in a news release.

Fitch affirms Rockwell Collins short-term

Fitch Ratings said it maintained the rating watch positive on Rockwell Collins, Inc.'s BBB long-term issuer default rating and BBB senior unsecured facilities and senior unsecured note ratings.

The agency also affirmed the company's short-term issuer default rating at F2.

On Sept. 6, 2017, Fitch placed the company’s long-term issuer default rating and other ratings on positive watch following the announcement that United Technologies, Inc. agreed to acquire the company.

The transaction is expected to be completed this month, and Fitch said it expects the credit profile of the combined entity will be stronger than that of stand-alone Rockwell Collins.

The agency said the stand-alone ratings are supported by the company’s highly diversified product base, competitive position in the global commercial aerospace industry, strong portfolio of defense products, strong operating margins, significant cash generation, technology portfolio and adequate financial flexibility.

S&P affirms Sempra Energy, SoCal Gas

S&P said it affirmed its BBB+ issuer credit rating on Sempra Energy and A issuer credit rating on subsidiary Southern California Gas Co. The outlooks remain negative.

At the same time, the agency affirmed the BBB+ senior unsecured debt rating at Sempra, the A+ senior secured debt rating at Southern California Gas, and the BBB+ rating on Southern California Gas' preferred stock. S&P also affirmed the short-term A-2 rating on Sempra and the A-1 short-term rating on Southern California Gas.

“The ratings affirmation follows the California legislature's approval of SB 901 and our high degree of confidence that the bill will become law. Although SB 901 provides various credit supportive measures for California's regulated electric utilities, we view this bill as a shorter-term measure that limits, but does not eliminate the risks borne by electric utilities,” S&P said in a news release.

Fitch keeps Express Scripts on watch

Fitch Ratings said it maintained Express Scripts Holding Co.’s issuer default ratings and individual securities ratings on rating watch negative.

The agency said the rating watch primarily reflects the pending regulatory approvals needed in order for Cigna Corp. to complete the acquisition of Express Scripts, which is expected by year-end 2018.

Fitch said it anticipates that upon the successful completion of the acquisition, the long-term and short-term issuer default ratings and senior unsecured debt ratings of Express Scripts and its subsidiaries will be equalized with those of its new parent company, Halfmoon Parent, Inc., to reflect the legal ties between the entities, including cross guarantees of the debt that Fitch believes will result in equal ranking of the debt outstanding at the new parent company and Express Scripts and its subsidiaries.

Fitch keeps Whitbread on watch

Fitch Ratings said it maintained Whitbread plc's long-term issuer default rating of BBB, short-term issuer default rating of F2 and senior unsecured rating of BBB on rating watch negative.

The rating watch reflects the announcement made by Whitbread on Aug. 31 that it agreed to sell Costa, its coffee chain business, to Coca-Cola Co. (A/stable) for £3.9 billion, the agency said.

Fitch said that in its view, this disposal would increase the business risk of Whitbread by reducing its scale and business diversification.

“The RWN will be resolved when the disposal is completed and management has clarified the allocation of proceeds,” the agency said in a news release.

Fitch: American Airlines unchanged by loan upsize

Fitch Ratings said it does not expect the planned upsizing of American Airlines, Inc.'s senior secured term loan B due October 2021 to impact the ratings of the company or the loan.

American's long-term issuer default rating is BB- and its outlook is stable.

Fitch rates the term loan BB+/RR1.

American is in the process of issuing a $300 million add-on to the existing $728 billion term loan B, with the proceeds to be used for general corporate purposes.

“The resizing of the term loan will not affect the key provisions, the collateral or the maturity of the loan,” Fitch said.

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