Moody’s cuts Novolex

Moody's Investors Service said it downgraded the corporate family rating of Flex Acquisition Co., Inc. (Novolex) to B3 from B2 and the probability of default rating to B3-PD from B2-PD.

The outlook is stable.

“Underperformance of the acquired Waddington business and legacy operations resulted in higher than expected leverage and will delay anticipated deleveraging by at least a year,” Anastasija Johnson, senior analyst at Moody's, said in a news release.

Additionally, the senior secured revolving credit facility was downgraded to B2 (LGD3) from B1 (LGD3), the senior secured term loan was downgraded to B2 (LGD3) from B1 (LGD3), and the senior unsecured bond rating was downgraded to Caa2 (LGD5) from Caa1 (LGD5).

S&P trims Chaparral Energy

S&P said it lowered the issuer credit rating on Chaparral Energy Inc. to CCC+ from B-. The outlook is negative.

S&P also lowered the issue-level rating on Chaparral's unsecured notes to CCC.

The agency revised the recovery rating on this debt to 5 from 4, indicating an expectation for modest (10%-30%; rounded estimate: 15%) recovery to creditors in the event of a payment default.

“The downgrade primarily reflects our view of Chaparral's liquidity position, which stood at approximately $154 million at the end of the quarter due to leverage covenant constraints imposed by the company's credit agreement,” S&P said in a news release.

“Although we expect Chaparral will gradually be able to access more of its $325 million borrowing base due to higher production rates and EBITDA, we project that cash flow outspend will encumber a significant portion of the credit facility over the next 12 to 24 months.”

Fitch lowers Intralot

Fitch Ratings said it downgraded Intralot SA's long-term issuer default rating to CCC+ from B-, and removed it from rating watch negative where it was placed on March 7.

Fitch also downgraded the senior unsecured rating on the bonds issued by Intralot Capital Luxembourg SA, and guaranteed by Intralot's key subsidiaries, to CCC+/RR4/36% from B-/RR4/33%.

The senior unsecured rating remains on rating watch negative.

“The downgrade reflects heightened liquidity and refinancing risks, with continuing negative free cash flow (FCF), albeit partly driven by capex associated with new contracts, and leverage remaining at a level no longer compatible with a B- rating,” the agency said in a news release.

Moody’s trims Picard

Moody's Investors Service said it downgraded Picard Bondco SA's corporate family rating to B3 from B2 and its probability of default rating to B2-PD from B1-PD.

Moody's also affirmed Picard's senior unsecured notes rating at Caa1 and downgraded Picard Groupe SAS' senior secured notes rating to B3 from B2.

The outlook remains stable.

“We expect Picard's earnings to erode somewhat over the next two years because of changing consumer behavior and fierce competition in France,” Vincent Gusdorf, Moody’s vice president, senior credit officer and lead analyst for Picard, said in a news release.

“As a result, Picard will be unable to reduce its leverage, which increased significantly over the last two years because of payments to shareholders.”

Moody’s trims Salem Media

Moody’s Investors Service said it downgraded Salem Media Group, Inc.'s corporate family rating and senior secured note rating to B3 from B2.

The outlook is stable.

“The downgrade is due to weaker than expected performance that has caused leverage to increase to 6.2x as of Q1 2019 from 5.6x as of Q1 2018,” the agency said in a news release.

“Results have continued to be impacted by the shift of ad dollars to digital mobile and social media, competitive conditions for local radio ad dollars, and declines in local block programing revenue.”

Moody’s lifts BioScrip, rates loan B2

Moody's Investors Service said it upgraded the corporate family rating of BioScrip, Inc. to B3 from Caa1 and upgraded the probability of default to B3-PD from Caa1-PD.

At the same time, Moody's upgraded the speculative grade liquidity rating to SGL-3 from SGL-4 and assigned a B2 (LGD 3) rating to the proposed $925 million first-lien term loan B.

The outlook is stable.

This concludes the review for upgrade that was initiated on March 18.

The agency said the upgrade reflects the improvement in BioScrip's credit profile due to the pending merger with HC Group Holdings III, Inc. (Option Care).

“BioScrip will benefit from the combined company's significantly larger scale, and increased diversity across payors, therapies and geographies,” the agency said in a news release.

S&P rates BioScrip loan B-

S&P said all of its ratings on BioScrip Inc., including the CCC+ issuer credit rating and issue level ratings, remain on CreditWatch with positive implications until the close of the merger with BioScrip competitor HC Group Holdings III Inc.

S&P also assigned a preliminary B- issue-level rating and 3 recovery rating to BioScrip's proposed $925 million first-lien term loan B.

“We expect to resolve the CreditWatch placement with a one-notch upgrade to B- and a stable outlook following the close of the merger, reflecting potentially significant synergies and a return to positive free cash flow over next two years,” S&P said in a news release.

Moody’s lifts Fiat Chrysler

Moody's Investors Service said it upgraded to Ba1 from Ba2 the corporate family rating and to Ba1-PD from Ba2-PD the probability of default rating of Fiat Chrysler Automobiles NV.

Also, the ratings on senior unsecured instruments issued by Fiat Chrysler Automobiles and Fiat Chrysler Finance Europe SA were upgraded to Ba2 from Ba3.

The outlook was changed to stable from positive.

“FCA's upgrade reflects the continued improvements in its credit metrics and Moody's expectation that FCA will be able to sustain these credit metrics even in a more challenging environment with softening demand in some of its key markets and additional costs to comply with upcoming emission requirements,” Falk Frey, a senior vice president and lead analyst at Moody’s, said in a news release.

Moody’s might lift Canbriam

Moody's Investors Service said it placed Canbriam Energy Inc.'s Ca corporate family rating, C-PD/LD probability of default rating and C senior unsecured notes ratings under review for upgrade.

The outlook was changed to ratings under review from negative.

“The ratings review follows the announcement that Canbriam has entered into definitive agreements, subject to regulatory approval, to be acquired by Pacific Oil and Gas Ltd. (PO&G, unrated) and intends to redeem its $350 million senior unsecured notes due November 2019 contingent on the completion of the transaction,” the agency said in a news release.

Moody’s reviews CNG, rates notes Caa2

Moody's Investors Service said it placed on review for upgrade CNG Holdings, Inc.'s Caa2 corporate family and senior secured ratings.

Moody's also assigned a Caa2 rating to CNG's planned $310 million of five-year senior secured notes and placed the rating on review for upgrade.

Upon completion of the new debt issuance, Moody's said it expects to upgrade the company's corporate family rating and senior secured debt rating for the newly issued notes to B3 from Caa2.

S&P assigns B- to QMax notes

S&P said it assigned preliminary B- issuer credit ratings to Q'Max Solutions Inc. (guarantor) and QMax Financial Holdings Inc. (issuer).

S&P also assigned a preliminary B- issue level rating and preliminary 3 recovery rating to the company's proposed $225 million senior secured notes due 2024. The outlook is stable.

“The B- preliminary issuer credit rating on Q'Max reflects the company's small scale and scope of operations, limited product diversity, and exposure to the highly cyclical oilfield services sector,” S&P said in a news release.

“This is partly offset by the company's good geographic footprint, including exposure to large international oil companies that often provide a measure of stability compared to the highly volatile North American market, on-shore and off-shore capabilities, and a diversified customer base.”

Moody’s rates QMax notes Caa2

Moody’s Investors Service assigned ratings to QMax Financial Holdings Inc., including a Caa1 corporate family rating, a Caa1-PD probability of default rating and a Caa2 rating on its senior secured notes.

The outlook is stable.

Proceeds from the issuance of the notes along with equity contributed by its sponsor will be used to refinance QMax's existing debt capital structure, fund its upcoming U.S. acquisition upfront payment and purchase leased equipment.

Additionally, the company is entering into a new credit agreement to provide for a $150 million revolver.

“The financing will support QMax's growth plans and improve its liquidity,” James Wilkins, Moody's vice president, said in a news release.

The agency said the corporate family ratings reflects QMax's modest size, high leverage with debt to EBITDA of 7x (before acquisition pro forma adjustments or adjustments for some one-time items to EBITDA) at year-end 2018, and volatile nature of its cash flows.

Fitch rates Credit Andorra notes B+, BBB-

Fitch Ratings said it assigned Credit Andorra SA's planned additional tier 1 and subordinated notes expected ratings of B+ and BBB-, respectively.

“The subordinated notes are notched down once from Credit Andorra's bbb viability rating (VR). The notching reflects the notes' greater expected loss severity relative to senior unsecured debt,” the agency said in a news release.

“These securities are subordinated to all senior unsecured debt.”

Moody’s rates Horizon Pharma loan Ba1

Moody's Investors Service said it assigned a Ba1 rating to the new senior secured term loan of Horizon Pharma USA, Inc., a subsidiary of Horizon Therapeutics plc.

There are no changes to Horizon's existing ratings, including the Ba3 corporate family rating, the Ba3-PD probability of default rating, the Ba1 senior secured rating, the B1 senior unsecured rating and the SGL-1 speculative grade liquidity rating.

The outlook remains stable.

Proceeds of the term loan are for the repayment of an existing term loan.

“The refinancing is credit-positive because it extends Horizon's maturity profile,” the agency said in a news release.

DBRS rates Kruger Packaging notes BB (high)

DBRS said it assigned a provisional issuer rating of BB (high) and a provisional senior unsecured notes rating of BB (high) with a recovery rating of RR3 to Kruger Packaging Holdings LP.

All trends are stable.

Kruger Packaging is expected to issue C$125 million of senior notes, the proceeds of which will be used to repay senior bank term debt and pay a distribution to unitholders that on a pro forma basis will slightly weaken leverage, DBRS said in a news release.

“The ratings benefit from KPH’s position in the less volatile paper packaging industry when compared to other forest product sub-sectors, its cost-effective mills and the unique properties of some of its products that give the company a competitive advantage,” DBRS said.

“However, the ratings are constrained by the company’s niche position and lack of diversification in the broader paper and forest products industry, its low (albeit increasing) forward integration into its corrugated box plants, its exposure to volatile input costs and the overall underlying volatility of the forest products industry.”

Fitch rates Neptune Energy bond BB

Fitch Ratings said it assigned Neptune Energy Group Midco Ltd. a long-term issuer default of BB with a stable outlook.

The agency also assigned a long-term senior unsecured rating of BB to the $550 million bond due 2025 issued by Neptune Energy Bondco plc.

“Neptune's BB rating reflects (i) its scale of operations and fairly diversified asset base; (ii) low financial leverage and conservative financial and hedging policies ; (iii) competitive unit profitability supported by relatively low production costs ; and (iv) focus on countries with stable operating environment,” the agency said in a news release.

“These factors mitigate the company's low proved reserves, which correspond to the lower end of the range we view as appropriate for producers in the BB rating category.”

S&P rates Sirius Computer loans B, notes CCC+

S&P said it affirmed its B issuer credit rating on SCS Holdings I Inc. (Sirius Computer Solutions Inc.). The outlook is stable.

S&P also assigned a B issue-level rating and 3 recovery rating to Sirius' proposed first-lien senior secured credit facilities, consisting of $750 million term loan and $190 million revolver, and a CCC+ issue-level rating and 6 recovery rating to the proposed $300 million senior unsecured notes.

Clayton, Dubilier, & Rice, a private equity sponsor, is acquiring SCS Holdings I (the holding company of Sirius Computer Solutions), for approximately $1.5 billion, partially funding the transaction with $1.05 billion of debt.

“The affirmation primarily reflects our expectation that adjusted leverage, pro forma for the proposed LBO debt financing, will remain within our leverage threshold at the B rating. Following the transaction, we estimate that pro forma S&P Global Ratings-adjusted debt to EBITDA will increase to the high-6x area, up from the high-5x area for the 12 months ended Dec. 31, 2018,” S&P said in a news release.

Moody’s rates Southcross loans Ba2

Moody's Investors Service said it assigned a Ba2 rating to Southcross Energy Partners, LP's $127.5 million senior secured priming super-priority debtor-in-possession term loans comprised of a $72.5 million new-money term loan and a $55 million new-money letter of credit term loan.

On May 7, the U.S. Bankruptcy Court for the District of Delaware approved up to $255 million of aggregate DIP loans, but Moody's did not rate the subordinated $127.5 million term loan (roll-up loan) that will be used to refinance pre-petition term loans held by Southcross Energy's DIP lenders.

These DIP facilities were provided by some pre-petition first-lien lenders that will help the company manage operations and liquidity needs during the Chapter 11 reorganization process, and the DIP credit agreement has a maturity date of Oct. 1.

Southcross Energy and its affiliated entities had filed a voluntary petition for relief under Chapter 11 on April 1, and Moody's subsequently withdrew all ratings on the company.

The Ba2 rating primarily reflects the collateral package and collateral coverage available to the rated DIP facilities, which Moody's views to be modestly strong, the agency said.

S&P rates Transocean Sentry notes B+

S&P said it assigned its B+ issue-level rating and 1 recovery rating to the proposed $500 million of senior secured notes due 2023 that will be issued by Transocean Sentry Ltd., a Cayman Islands indirect subsidiary of offshore drilling contractor Transocean Ltd.

The 1 recovery rating on the notes indicates an expectation for very high recovery (90%-100%; rounded estimate: 95%) for creditors in a payment default.

S&P also affirmed its B+ issue-level rating on Transocean's existing secured debt (including its secured credit facility), the B issue-level rating on its unsecured debt with subsidiary guarantees, and the B- issue-level rating on its unsecured debt without guarantees, although S&P said it is revising the recovery rating on the unsecured debt to 3 from 4 based on a higher estimate of enterprise value.

All of the company’s other ratings remain unchanged.

Moody’s rates Transocean Sentry notes B1

Moody's Investors Service said it assigned a B1 rating to Transocean Sentry Ltd.'s proposed $500 million senior secured notes due 2023.

Concurrently, Moody's affirmed Transocean Inc.'s B3 corporate family rating, B3-PD probability of default rating, Caa1 rating on the priority guaranteed senior unsecured notes and Caa2 senior unsecured notes rating.

Moody's also affirmed the B1 rating on Transocean Guardian Ltd.'s 2024 notes, Transocean Pontus Ltd.'s 2025 notes and Transocean Poseidon Ltd.'s 2027 notes.

Moody's affirmed Transocean's SGL-1 speculative grade liquidity rating.

The outlook remains negative.

“There are modest signs of recovery in the offshore drilling sector, but the recovery is not sufficient yet for Transocean to reduce its debt burden and moderate its high financial leverage,” Sreedhar Kona, Moody's senior analyst, said in a news release.

“The company's high debt burden and still unclear path to an improvement in financial leverage is reflected in the negative outlook.”

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