Moody's lowers Britax view to negative

Moody's Investors Service said it changed Britax Group Ltd.'s outlook to negative from stable.

The agency also said it affirmed the company's Caa1 corporate family rating and Caa1-PD probability of default rating.

Moody's also said it affirmed the Caa1 rating assigned to the €323 million equivalent first-lien term loan and €20 million revolving credit facility available at Britax U.S. Holdings Inc. as lead borrower.

The outlook on Britax U.S. Holdings also was revised to negative from stable.

The outlook revision reflects the company's weak results during the first six months of 2018, which were below expectations, the agency said.

This was partially due to one-off events that are not expected to repeat going forward, Moody's explained.

But, the weaker-than-expected performance reduced the company's flexibility to absorb any additional difficulties, the agency said.

Fitch lowers Cardinal Health

Fitch Ratings said it downgraded Cardinal Health, Inc.'s long-term issuer default rating to BBB from BBB+ and affirmed the company's short-term issuer default rating at F2.

The outlook is stable.

The downgrades reflect an expectation that Cardinal's leverage will remain elevated for the BBB+ rating, Fitch explained.

The elevated leverage is a result of the acquisition of certain assets from Medtronic's patient care, deep vein thrombosis and nutritional insufficiency business, lower earnings tied to weaker performance from the pharmaceutical segment, Fitch said, and heightened regulatory and litigation expenses.

The ratings benefit from a stable operating profile and consistent cash generation, the agency said.

Cash generation is supported by steady pharmaceutical demand and an oligopolistic drug distribution industry in the Unites States despite headwinds from generic drug pricing and regulatory pressures, Fitch said.

S&P cuts CMC di Ravenna

S&P said it lowered its long-term issuer credit rating on CMC di Ravenna to B- from B.

The rating remains on CreditWatch with negative implications.

At the same time, the agency lowered the issue ratings on the €325 million and €250 million senior unsecured bonds to B- from B. The issue ratings also remain on CreditWatch with negative implications.

The recovery rating on both instruments remains 4, indicating an expectation of average recovery prospects (30%-50%, rounded estimate 35%) in the event of a payment default.

“The downgrade indicates that, based on our revised base-case assumptions, we expect CMC's credit metrics to weaken in 2018. The company is still working to collect delayed project payments of about €110 million,” S&P said in a news release.

“The rating action also reflects our view that the company liquidity position has worsened.”

Moody's downgrades Dixie

Moody's Investors Service said it considers the expiration of Dixie Electric, LLC's grace period for the missed September interest payment of the first-lien term loan due 2020 as a limited default.

The probability of default rating also was downgraded to C-PD/LD (limited default) from Ca-PD.

The Ca corporate family rating also was affirmed, along with the Ca ratings on the bank credit facilities.

The outlook remains negative.

While the five-day grace period on the first-lien term loan due 2020 expired in early September, Dixie and certain lenders entered into a 30-day forbearance agreement, which was subsequently extended by two weeks, Moody's said.

The ratings reflect the company's heightened debt-restructuring risk, the agency said.

Moody's said it expects that activity levels and earnings will gradually recover in 2018 through 2019, but may not be able to sustainably support debt service and liquidity needs.

The credit profile also reflects Dixie's modest scale, lack of geographic and end-market diversification, the agency said, and its reliance on the highly cyclical upstream oil and gas sector.

Fitch downgrades Jones Energy

Fitch Ratings said it downgraded the long-term issuer default ratings of Jones Energy Holdings LLC and Jones Energy, Inc. to CC from CCC-.

The agency also said it downgraded the ratings on the secured revolver and secured bonds to CCC+ with recovery rating of RR1 from B- with recovery rating of RR1, along with the ratings on the senior unsecured notes to C with recovery rating of RR5 from CC with recovery rating of RR5.

The ratings reflect the company's production volume shrinkage, declining liquidity and elevated leverage, Fitch said.

These concerns put in question the long-term viability of Jones' current business model and highlight the need for strategic alternatives, the agency said.

The downgrades are a result of information provided in an 8-K filed by the company Oct. 15, announcing that the drilling company's transaction that it was pursuing did not close and that the company has chosen to defer its pursuit of the company, Fitch said.

Moody's downgrades Pier 1

Moody's Investors Service said it downgraded Pier 1 Imports (U.S.), Inc.'s corporate family rating to Caa1 from B3 and probability of default rating to Caa1-PD from B3-PD.

Moody's also said it downgraded the company's senior secured term loan rating to Caa2 from B3 and the speculative grade liquidity rating to SGL-3 from SGL-2.

The outlook is stable.

The significant early stumbles of Pier 1's implementation of its strategic plan, which contributed to a meaningful EBITDA loss in the most recent quarter, increase the risk that the subsequent earnings recovery will be considerably weaker and take longer than originally anticipated, Moody's said.

While the company has adequate near-term liquidity, a material operational turnaround in the next 12- to 18-months is needed to achieve a sustainable capital structure, the agency said.

The ratings also consider the company's weak operating results and high funded leverage, Moody's said.

S&P lowers Transcom

S&P said it lowered its long-term issuer credit rating on Transcom TopCo AB to B- from B. The outlook is stable.

At the same time, the agency lowered the issue rating on Transcom's €180 million senior secured notes to B- from B. The recovery rating is 4, indicating an expectation of average (30%-50%; rounded estimate: 40%) recovery in the event of payment default.

“The downgrade reflects the risk that Transcom's customer rationalization efforts – along with the high costs associated with its restructuring program – will continue into 2019, resulting in continued negative free cash flow,” S&P said in a news release.

“While we believe these transformation efforts will improve profitability and free cash flow generation over the coming years, we view the ensuing risk of a near term liquidity constraint as meaningful, given weakening cash generation and reduced effective availability of Transcom's revolving credit facility (RCF), as further drawings could trigger the springing net leverage covenant.”

S&P lowers Ultra Petroleum

S&P said it lowered its issuer credit rating on Ultra Petroleum Corp. to CC from CCC+. The outlook is negative.

At the same time, the agency lowered the issue-level rating on the company's unsecured debt to CC from CCC+. The recovery rating remains 3, indicating an expectation of meaningful (50%-70%; rounded estimate: 65%) recovery in the event of a payment default.

In addition, S&P affirmed the B issue-level rating on the company's secured debt term loan. The recovery rating remains 1, indicating an expectation of very high (90% to 100%; rounded estimate: 95%) recovery in the event of a payment default.

The downgrade follows the company's announcement that it has entered into privately negotiated exchange agreements with some holders representing a combined $823.5 million of its 6 7/8% notes due 2022 and of its 7 1/8% notes due 2025 for 9% cash and 2% PIK senior secured second-lien notes due July 2024 and warrants.

“The proposed exchange at below par value as well as the extension of the maturity led us to assess the value as less than the original promise,” S&P said in a news release.

Fitch puts Ultra unsecured notes on watch

Fitch Ratings said it affirmed the long-term issuer default ratings of Ultra Petroleum Corp. and Ultra Resources, Inc. at B with a negative outlook, along with the rating on the secured revolver and term loan at BB with recovery rating of RR1.

Fitch also said it placed the B with recovery rating of RR4 on the senior unsecured notes on Rating Watch negative.

The agency said it expects the remaining senior unsecured notes will be downgraded upon completion of the debt exchange.

The negative outlook reflects the continued downside risk to the financial flexibility as availability under the revolving credit facility could be constrained by the maximum net leverage covenant, Fitch explained.

The agency noted that minimum borrowings are expected under the revolving credit facility over the coming quarters under its base case scenario and that further asset monetization could bolster the liquidity position.

On Oct. 17, Ultra announced that it had entered into an agreement with holders of about $556.4 million of its 6 7/8% senior notes due 2022 and about $267.1 million of its 7 1/8% senior notes due 2025 to exchange all of the old notes for new 9% cash/2% payment-in-kind senior-secured second-lien notes due July 2024 and new warrants entitling each holder to purchase one common share of the company.

Under terms of the exchange agreement, the company is permitted to exchange up to 80% of the 2022 notes and 55% of the 2025 notes, Fitch noted.

The exchange agreement is expected to reduce debt by about $250 million and about $560 million of the company's debt due in 2022 will be extended until July 2024, the agency said.

Pro forma for the exchange, Ultra said it believes its debt-to-EBITDA ratio will improve to 3.3x from about 3.7x as of Sept. 30, Fitch said.

Moody's upgrades Credit Acceptance

Moody's Investors Service said it upgraded the corporate family and senior unsecured ratings of Credit Acceptance Corp. to Ba3 from B1.

The outlook is stable.

The upgrades reflect the company's strong performance, along with its profitability, capital and leverage, which continue to be robust in the face of a competitive environment in subprime auto lending, Moody's said.

Credit Acceptance also continues to proactively manage the maturities of its financing sources to mitigate the risk of any unexpected contraction in market funding, the agency said.

S&P upgrades Crown Holdings

S&P said it raised its issuer credit rating on Crown Holdings Inc. to BB+ from BB.

The outlook is stable.

At the same time, the agency raised the issue-level ratings on Crown's senior secured facilities to BBB- from BB+. The recovery rating remains 2, indicating an expectation of substantial recovery (70%-90%; rounded estimate: 75%) in the event of a payment default.

S&P also raised Crown European Holdings SA's unsecured notes to BB+ from BB. The recovery rating remains 3, indicating an expectation of meaningful recovery (50%-70%; rounded estimate: 55%) in the event of a payment default.

Crown America's unsecured notes were raised to BB- from B+. The recovery rating remains 6, indicating an expectation of negligible recovery (0%-10%; rounded estimate: 0%) in the event of a payment default.

Crown Cork and Seal's unsecured debentures were also raised to BB- from B+. The recovery rating remains 6, indicating an expectation of negligible recovery (0%-10%; rounded estimate: 0%) in the event of a payment default.

“The upgrade reflects our view that acquiring Signode Industrial Group Holdings enhances Crown's business, and that the company has a credible path to maintaining S&P-adjusted leverage below 5x,” the agency said in a news release.

S&P ups Euronet convertibles

S&P said it raised the issue-level rating on Euronet Worldwide Inc.'s senior unsecured convertible notes to BBB- from BB+ following the refinancing of its secured credit facility with a new five-year $1 billion unsecured revolving credit facility.

The agency said it previously rated the senior unsecured convertible debt one notch below the BBB- rating on Euronet because the company had a secured facility, which constituted a significant amount of the company's total debt, and S&P believed the senior unsecured convertible debtholders would be at an inherent disadvantage compared with the secured facility lenders.

Following the refinancing, the senior unsecured convertible debt will rank pari passu with the unsecured revolving credit facility.

S&P upgrades Gamenet Group

S&P said it raised its issuer credit rating on Gamenet Group SpA to B+ from B and removed the rating from CreditWatch, where it was placed on Sept. 10 with positive implications.

The outlook is stable.

At the same time, the agency assigned a B+ issue rating to the €225 million senior secured notes issued in September and raised the issue rating on the existing €225 million senior secured notes to B+ from B.

The recovery rating on the total €450 million senior secured notes ranking pari passu is 3, indicating an expectation for meaningful recovery (50%-70%; rounded estimate: 65%) in the event of a default.

“The upgrade reflects our expectation that the acquisition of GoldBet will support better visibility of earnings as it enables the company to gain scale, increase market share in the Italian gaming market, and improve product diversity,” the agency said in a news release.

“In our view, the acquisition of GoldBet will allow Gamenet to strengthen its business risk profile.”

S&P upgrades Netflix

S&P said it raised its issuer credit rating on Netflix Inc. to BB- from B+. The outlook is stable.

At the same time, the agency raised the issue-level ratings on the company's senior unsecured debt by one notch to BB-, in line with the issuer credit rating.

The 3 recovery rating is unchanged and indicates an expectation for meaningful recovery (50%-70%; rounded estimate: 65%) of principal in the event of a payment default.

“The upgrade follows the company's improving EBITDA margin performance over the last 12 months, driven in part by price increases instituted by the company and continued and accelerated subscriber growth,” S&P said in a news release.

“These factors demonstrate the strength of the company's business model and its ability to expand globally, increase margins, and manage its increasing debt burden.”

S&P lifts TDC notes, revolver

S&P said it affirmed its B+ long-term issuer credit ratings on DKT Holdings ApS, the ultimate parent of TDC A/S, and on its subsidiary DKT Finance ApS.

The agency also affirmed the B+/B long- and short-term issuer credit ratings on TDC.

The outlook is stable.

S&P affirmed the BB- issue rating on TDC's €3.9 billion senior secured term loan. The recovery rating remains at 2, indicating an expectation of about 75% recovery for noteholders in the event of a payment default. The rating was removed from CreditWatch with negative implications, where it was placed on July 19.

The agency raised the issue rating on TDC's €1 billion senior unsecured notes and €500 million revolving credit facility to BB- from B+. The recovery rating is now 2, revised from 3 previously, indicating an expectation of about 75% recovery. The rating was removed from CreditWatch with positive implications.

S&P affirmed the B- issue rating on DKT Finance's €1.4 billion subordinated notes. The 6 recovery rating, indicating an expectation of zero recovery, is unchanged.

“The affirmation reflects our understanding that TDC will use the majority of the proceeds from the sale of its Norwegian cable TV, broadband, and business-to-business operations to Swedish incumbent telecom operator Telia Co. AB to repay debt,” the agency said in a news release.

“As such, in our view, this will offset the incrementally negative impact of the company's reduced footprint and smaller revenue base following the disposal.”

S&P revises Cardinal view to negative

S&P said it revised its outlook on Cardinal Holdings 3, LP, parent of Capco, and its finance subsidiary Cardinal US Holdings, Inc. to negative from stable.

At the same time, the agency affirmed the B long-term issuer credit ratings on both entities.

Additionally, S&P affirmed the B long-term issue ratings on Cardinal US Holdings' $250 million senior secured term loan and $65 million senior secured revolving credit facility. The 3 recovery rating remains, indicating an expectation of meaningful (50%-70%; rounded estimate 55%) recovery in the event of a payment default.

“The rating action reflects that we anticipate weaker credit metrics, in particular higher adjusted debt to EBITDA, weaker free cash flow, and weaker cash interest coverage ratio than we previously expected, due to higher-than-expected restructuring costs, and cash distributions made by Cardinal Holdings on its preferred shares,” the agency said in a news release.

S&P changes Contanda view to negative

S&P said it revised the outlook on Contanda LLC to negative from stable and affirmed the B issuer credit rating.

At the same time, the agency affirmed the B issue rating on Contanda's senior secured debt. The recovery rating remains 3, indicating an expectation of meaningful recovery.

“The negative outlook primarily reflects our updated view of Contanda LLC's heightened refinance risk and general lack of liquidity in light of its approaching term loan B maturity in February 2020,” S&P said in a news release.

“The increased refinance risk could lead to a lower rating (of one or more notches) over the next six months in the absence of a credible plan to refinance or repay its lenders upon the maturity.”

Moody's rates Cabot Microelectronics loan Ba2

Moody's Investors Service said it assigned a first-time Ba2 corporate family rating to Cabot Microelectronics Corp.

Moody's also said it assigned Ba2 ratings to the company's proposed $1.065 billion first-lien term loan and $200 million revolving credit facility, which is expected to be undrawn at closing.

The company plans to acquire KMG Chemicals, Inc. for $1.6 billion.

The proceeds from the term loan, along with 0.20 shares of Cabot Microelectronics common stock per KMG common share, and about $182 million cash on the balance sheet, will be applied toward the acquisition, Moody's explained.

Thea agency also said it assigned a speculative grade liquidity rating of SGL-2, indicating good liquidity to support operations in the near-term.

The outlook is stable.

The ratings reflect the increased scale and solid industry positions in key end-markets of the semiconductor industry, which are offset by the challenges of integrating a transformational acquisition and modestly elevated leverage for the rating, Moody's said.

S&P gives Cabot Microelectronics loan BB+

S&P said it assigned its BB issuer credit rating to Cabot Microelectronics Corp.

The outlook is stable.

At the same time, the agency assigned its BB+ issue-level rating to the proposed $1.265 billion senior secured credit facility. The recovery rating is 2, indicating an expectation of substantial (70%-90%; rounded estimate: 75%) recovery in the event of payment default.

Cabot is acquiring KMG Chemicals for $1.6 billion, including the refinancing of about $300 million of existing KMG debt.

“Our ratings reflect our assessment of the combined entity's favorable geographic diversification, with a sales split of 45% Asia, 45% North America, and 10% Europe,” S&P said in a news release.

“In addition, the ratings reflect our view of the company's modest end-market diversity because its products extend beyond the semiconductor industry, to both the energy and industrial wood treatment end markets.”

Fitch rates Progressive notes A

Fitch Ratings said it assigned an A rating to the Progressive Corp.'s issuance of $550 million of senior unsecured notes due in 2029.

The ratings are based on the company's very strong operating performance, risk-based capital position, market leading risk-management and underwriting expertise, Fitch said, and its significant personal and commercial auto insurance franchise.

The rating on the notes is equivalent to the ratings on Progressive's existing senior debt, the agency noted.

The proceeds will be used for general corporate purposes.

The company's profitability promotes strong interest coverage, Fitch said.

S&P rates Progressive notes A

S&P said it assigned its A issue-level rating to Progressive Corp.'s issuance of senior unsecured debt.

The agency said the ratings on the senior unsecured notes are linked to the issuer credit rating.

S&P said it expects the company to use the net proceeds for general corporate purposes.

As such, the agency said it expects the issuance to result in higher pro forma leverage and lower fixed-charge coverage, although these metrics will trend towards more historical levels through earnings accretion.

S&P said it also expects financial leverage of 30%-33% and fixed-charge coverage of 8.6x-9.6x over the next 24 months.

The transaction does not affect the A long-term issuer credit rating or stable outlook, the agency noted.

Fitch rates XO loan B+

Fitch Ratings said it assigned a long-term issuer default rating of B to XO Management Holding Inc. with a positive outlook.

The agency also said it assigned an expected senior secured rating of B+ to XO's term loan B for $280 million with a recovery rating of RR3.

The ratings consider the on-demand business aviation company's stable business profile, supported by its flexible business model, robust yield and fleet management, Fitch said.

XO's credit metrics are comparable with those of the similarly rated peers, the agency noted.

The ratings also reflect the company's operations on a small scale based on EBITDA and in a highly fragmented market, Fitch said.

S&P affirms Young Innovations

S&P said it affirmed its B- long-term issuer credit rating on YI Group Holdings LLC (Young Innovations).

The outlook remains positive.

At the same time, the agency affirmed the B- issue-level rating on the company's first-lien secured debt, which comprises a $50 million revolving credit facility, a $270 million term loan and $67.5 million delayed-draw facility.

The 3 recovery rating remains, indicating an expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a payment default.

The change in the rounded estimate to 55% from 60% reflects a higher portion of first-lien debt in the capital structure as a result of the drawings on the company's delayed-draw facility, S&P said.

“The rating affirmation reflects our expectation that over the next 18 months, the company will sustain its current rapid revenue growth and stable EBITDA margins in the 28%-30% range, resulting in leverage decreasing to the mid-7x area in 2019 from 8x in 2018 and FOCF improving to around $15 million in 2019,” S&P said in a news release.

S&P cuts Invesco, rates preferreds BBB-

S&P said it lowered its issuer credit rating on Invesco Ltd. to BBB+ from A. The outlook is stable.

At the same time, the agency lowered the issue rating on the firm's senior unsecured notes to BBB+ from A and assigned a BBB- rating to the firm's proposed perpetual preferred stock.

“The downgrade reflects our expectation that Invesco's leverage will increase to the low 2x area as a result of the OppenheimerFunds transaction,” S&P said in a news release.

“This is in contrast to our previous expectation for leverage to decrease back toward 1x by the end of 2018 and be maintained around that level into 2019.

“The primary driver of the increase in leverage is the addition of $4 billion in preferred stock to the company's capital structure.”

S&P rates Walker & Dunlop loan BBB-

S&P said it assigned its BBB- issue rating and 1 recovery rating to Walker & Dunlop Inc.'s proposed $250 million senior secured term loan due November 2025.

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

The company will use the proceeds from the new loan to repay its existing $165.7 million term loan due 2020 and for general corporate purposes.

Pro forma the transaction, S&P said it expects leverage to marginally rise to about 1x, which is well within its expectation of leverage staying below 1.5x.

The issuer credit rating on Walker & Dunlop remains at BB with a stable outlook.

S&P gives DXC Technology loan BBB

S&P said it assigned its BBB issue-level rating to DXC Technology Co.'s £450 million term loan due 2022.

DXC is the parent company of CSC Computer Sciences International Operations, the borrower of the term loan.

“We expect the company to use the proceeds from this term loan to repay advances under its existing credit agreement and for general corporate purposes,” the agency said in a news release.

“Our BBB issuer credit rating on DXC is unchanged and we rate the new term loan at the same level as our issuer credit rating on the company.”

S&P affirms Oncor Electric

S&P said it affirmed its A issuer credit rating on Oncor Electric Delivery Co. LLC.

The outlook is stable.

At the same time, the agency affirmed the A+ rating on Oncor's senior secured debt and its A-1 short-term rating.

Oncor Electric Delivery announced an agreement to acquire 100% of InfraREIT Inc. for about $2.2 billion, including the assumption of existing debt.

S&P said it expects the company will fund the proposed acquisition primarily with an expected capital contribution from Oncor's owners, which is consistent with its commitment to maintain credit quality.

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