Moody's assigns Iqvia loan Ba1

Moody's Investors Service said it assigned a Ba1 rating to the new senior secured term loan A issued by Iqvia Inc. There are no changes to the company's other ratings, including its Ba2 corporate family rating. The outlook is stable.

Iqvia will be using the proceeds to pay down revolver borrowings and for general corporate purposes.

S&P downgrades Natel

S&P said it lowered its ratings on Natel Engineering Co., which does business as NEO Tech, and its senior secured term loan to B from B+. The 3 recovery rating remains unchanged, indicating expectations for a meaningful (50%-70%; rounded estimate: 60%) recovery in a default.

The downgrade reflects Natel’s weaker-than-expected operating performance in the fiscal year 2020 (ending in January) as the company’s revenue fell due to a reduction in demand from a major customer. Natel’s EBITDA margins also weakened because of issues at one of its manufacturing plants, S&P said.

The outlook is negative.

S&P cuts Ascena Retail

S&P said it downgraded Ascena Retail Group Inc. to SD from CCC and the rating on its term loan due in August 2022 to D from CCC.

Ascena recently repurchased $112 million of the total principal of its 2022 term loan facility at about 37% below par in two separate transactions, a trend S&P said it expects to continue.

“We view these repurchases as distressed and tantamount to default given the company's weak credit profile and increasing operating challenges in an intensely competitive retail apparel industry,” said S&P in a press release.

The agency said it will likely raise Ascena’s rating back to CCC in the coming days to reflect the risk of a conventional default.

S&P lowers BWX Technologies

S&P said it lowered the ratings on BWX Technologies Inc. and its unsecured notes due 2026 to BB from BB+. The recovery rating on the notes remains 4.

“BWX Technologies Inc.'s cash flow is likely to be much weaker than we expected because of higher capital expenditures (capex) and working capital requirements, resulting in weaker credit metrics over the next two years than previously anticipated,” said S&P in a press release.

The outlook is stable.

Fitch cuts, pulls Conduent ratings

Fitch Ratings said it downgraded Conduent Inc.'s and Conduent Business Services, LLC's long-term issuer default rating by one notch to BB- from BB with a negative outlook. Fitch also downgraded the senior secured issue ratings on debt issued by Conduent Business Services by one notch to BB/RR1 from BB+/RR1 and the senior unsecured rating to BB-/RR4 from BB/RR4. Additionally, Fitch withdrew Conduent's ratings for commercial reasons.

The downgrade and outlook reflect that while 2019 results were generally in line with Fitch's expectation at the time of the downgrade in August, the company's free cash flow deficit was worse than expected.

“Additionally, revenue declines appear to be accelerating based upon management guidance and Fitch now sees revenue down about 7% versus 5% previously. As such, we are no longer expecting revenue to stabilize over the forecast horizon as previously,” said Fitch in a press release.

S&P trims 24 Hour Fitness

S&P said it trimmed 24 Hour Fitness Worldwide Inc.’s rating to CCC+ from B-. The agency also lowered the issue-level rating on the company's senior secured credit facility to B- from B, with a 2 recovery rating and the rating on the company's senior unsecured notes to CCC- from CCC, with a 6 recovery rating.

“The downgrade reflects heightened economic uncertainty because of Covid-19, significant exposure to California (which could be under pressure because of the coronavirus) and material risks related to the ongoing transformation in the company's sales and operating model. The company experienced a material decline in financial performance through the first three quarters of 2019, and we believe there are more risks to the company's ability to improve operating performance in 2020,” said S&P in a press release.

The outlook is negative.

S&P cuts Olin

S&P said it downgraded the ratings for Olin Corp. and its senior unsecured debt to BB from BB+. The 3 recovery rating remains unchanged, indicating expectations for a meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a payment default.

“The downgrade follows Olin's significantly weaker performance in 2019 and our expectation that its EBITDA and credit metrics will deteriorate further in 2020. The company's adjusted EBITDA declined by about $320 million, or 25%, in 2019 on pricing and volume declines in its chlor alkali products and vinyls segment and reduced epoxy margins, which it marginally offset with lower raw material costs, productivity improvements and management's cost-reduction initiatives.

The agency expects that the company's performance will continue to weaken in 2020 because export prices for caustic soda were at 10-year lows as of the beginning of the year.

The outlook is negative.

S&P cuts Tutor Perini

S&P said it downgraded Tutor Perini Corp. to B from B+, lowered the rating on its senior unsecured notes to B and dropped the rating on the convertible notes to CCC+.

“The downgrade takes into account Tutor Perini's weaker than previously expected operating performance in 2019 and the spring-forward maturity on the company's revolver. Tutor Perini took two large charges and incurred losses in its specialty contractors segment in 2019. In addition, the company has a spring-forward maturity in December 2020 on its revolver if the company's $200 million convertible notes due 2021 remain outstanding,” said S&P in a press release.

The outlook is negative.

Moody’s ups Donnelley revolver

Moody’s Investors Service said it affirmed Donnelley Financial Solutions, Inc.’s B1 corporate family rating, B1-PD probability of default rating, B2 senior unsecured notes rating and upgraded the senior secured revolving credit facility rating to Ba1 from Ba2. The speculative grade liquidity rating was unchanged at SGL-3. The outlook remains stable.

“The CFR affirmation reflects expectations for moderate leverage through the next 12 to 18 months,” said Peter Adu, a Moody’s vice president and senior analyst, in a press release. “The upgrade of the revolving credit facility reflects higher recovery prospects as a result of the reduced amount of secured debt in the capital structure following full repayment of the secured term loan.”

S&P revises Garrett view to negative

S&P said it revised the outlook for Garrett Motion Inc. to negative from stable.

“We expect the effects of Covid-19 will hamper Garrett Motion’s EBITDA and free operating cash flow (FOCF) in 2020. Given Garrett Motion’s large supply base in China and our expectation of lower global auto demand following the outbreak of the novel coronavirus, we expect the company’s operating performance will deteriorate in 2020,” said S&P in a press release.

S&P affirmed its BB- ratings on Garrett and the company’s debt.

Moody's changes Ignition view to negative

Moody's Investors Service said it changed the outlooks for Ignition Topco BV and Ignition Midco BV to negative from stable.

Moody's changed the outlook to negative to reflect the weakening operating performance that resulted in Moody's-adjusted EBITDA of €56.3 million in 2019 and led Moody's-adjusted gross leverage to increase to 6x. At the same time Ignition maintained EBITDA margins above 20% and generated free cash flow of €10.8 million.

The agency affirmed the B2 ratings on Ignition and its senior secured term loan and senior secured revolver borrowed by Ignition Midco.

S&P revises Kratos view to negative

S&P said it revised the outlook for Kratos Defense & Security Solutions Inc. to negative from stable on lower cash flow. The agency also affirmed Kratos’ B+ rating.

“Loss of the Saudi Arabia training contract, higher capital expenditures, and continued working capital outflows will likely result in free cash outflow in 2020. Although Kratos Defense & Security Solutions Inc. has protested the loss of the training contract and it could be extended, our forecast incorporates the existing contract expiring March 31, 2020, which results in about a $40 million loss in revenues,” said S&P in a press release.

Capital expenditures are now likely to be almost $50 million in 2020, compared to S&P’s previous forecast of $25 million, largely driven by investments for the Valkyrie tactical drone program.

Fitch puts United 2018-1 certs on watch

Fitch Ratings said it placed United Airlines’ 2018-1 class AA and class A certificates on rating watch negative.

The rating watch reflects increased levels of tail risk associated with the uncertainty around the grounding of the 737 MAX program and the potential effect of the coronavirus on the airline industry. The collateral pool includes six 737 MAX aircraft among other aircraft manufactured by Boeing.

The agency affirmed the BBB rating on the class B certificates

Moody's reviews Lindblad for downgrade

Moody's Investors Service said it placed the ratings of Lindblad Expeditions, LLC on review for downgrade including its B1 corporate family rating, B2-PD probability of default rating and its B1 senior secured rating.

"The review for downgrade is prompted by soft booking trends and increased cancellations related to the global spread of the coronavirus (Covid-19)," stated Pete Trombetta, a Moody's lodging and cruise analyst, in a press release.

"While the cruise industry has seen past cyclical downturns including recession and terrorist attacks, Covid-19 will pressure the cruise companies' earnings and liquidity to a degree we haven't seen before," added Trombetta.

S&P rates Mediacom loans BBB-

S&P said it assigned BBB- ratings to secured loans to be issued by Mediacom Broadband LLC and Mediacom LLC. Both companies are subsidiaries of Mediacom Communications Corp.

The recovery rating on the proposed debt issued by subsidiaries of Mediacom Broadband (including MCC Georgia LLC) is 1, indicating expectations for a very high recovery in a simulated default (90%-100%; rounded estimate: 95%). This includes a $500 million term loan A-2, a $425 million term loan A-3 and a $375 million revolver that all mature in March 2025.

The recovery rating on the proposed debt issued by subsidiaries of Mediacom LLC (including Mediacom Illinois LLC) is 2 indicating expectations for a substantial (70%-90%; rounded estimate: 70%) recovery in a simulated default. This includes a $500 million term loan A-2 and a $370 million revolver that are both due in March 2025.

Proceeds will be used to repay debt. As a result, S&P considers the transaction to be leverage neutral.

Moody's places NCL on review for cut

Moody's Investors Service said it placed the rating of NCL Corp. Ltd. on review for downgrade including its Ba1 corporate family rating, Ba1-PD probability of default rating, Ba1 senior secured rating and Ba2 senior unsecured rating.

"The review for downgrade is prompted by soft booking trends and increased cancellations related to the global spread of the coronavirus (Covid-19)," said Pete Trombetta, a Moody's lodging and cruise analyst, in a press release.

"While the cruise industry has seen past cyclical downturns including recession and geopolitical events, Covid-19 will pressure the cruise companies' earnings and liquidity to a degree we haven't seen before," added Trombetta.

S&P drops Optimas OE

S&P said it dropped its rating on Optimas OE Solutions Holding LLC to SD from CCC+ and lowered the rating on the company’s senior unsecured notes due 2021 to D from CCC.

The downgrade follows the company's distressed repurchase of a portion of its $225 million of senior secured notes due 2021. The company bought back $33 million of the notes for $20 million in cash. The face value it offered on the notes is about 60% of the repurchased notes' original par value.

S&P said it views the transaction as distressed because the debt investors did not receive the originally promised principal amount. Therefore, the agency lowered the issue-level rating on these notes to D.

Moody's downgrades Carnival

Moody's Investors Service said it downgraded the senior unsecured rating and senior secured revenue bond ratings of Carnival Corp. and Carnival plc to Baa1 from A3. Moody's also placed the company's ratings on review for further downgrade.

“The downgrade reflects Moody's expectation that soft booking trends and increased cancellations related to the global spread of the coronavirus (Covid-19) will significantly impact Carnival's earnings in 2020, resulting in metrics outside of levels appropriate for a single A rating,” said Pete Trombetta, a Moody's lodging and cruise analyst, in a press release.

“Following earnings pressure in the second half of 2019 due to the ban on travel to Cuba and European pricing pressure, Carnival entered 2020 with metrics that were slightly within the range for an A3 long-term credit rating with minimal cushion to absorb a shock such as Covid-19,” added Trombetta.

While the cruise industry has seen cyclical downturns including recessions and terrorist attacks, Moody's said it believes Covid-19 will more significantly pressure the cruise companies' earnings, cash flow and liquidity as compared to previous cycles.

S&P upgrades Lam Research

S&P said it upgraded Lam Research Corp. and its debt to A- from BBB+.

The upgrade reflects the strong expansion of Lam's market share in the wafer fab equipment industry over the past decade, its consistent cash flow generation through the recent semiconductor industry downturn and S&P’s expectation the company will increase its revenue in line with, or at a faster pace than, the wafer fab equipment industry over the next several years.

“We expect Lam's revenue to exceed $10 billion in fiscal year 2020, which would indicate that it has nearly doubled its scale over the past five years,” said S&P in a press release.

The outlook is stable.

Fitch upgrades Nvidia

Fitch Ratings said it upgraded the long-term for Nvidia Corp. to A from A-. Fitch also revised the outlook to stable from positive.

The rating and outlook reflect Fitch's expectation for continued market leadership from solid adoption of Nvidia's gaming and accelerated computing platforms despite headwinds from the coronavirus, which Fitch believes could meaningfully affect demand as well as supply through at least the first half of calendar 2020.

Fitch said it expects Nvidia's financial policies to remain conservative, which the company demonstrated by pausing stock buybacks to build cash to fund the pending $6.9 billion all-cash acquisition of Mellanox Technologies Ltd. announced last March and expected to close in the first part of 2020.

Moody's reviews Royal Caribbean for trim

Moody's Investors Service said it placed the ratings of Royal Caribbean Cruises Ltd. on review for downgrade including its Baa2 senior unsecured rating.

"The review for downgrade is prompted by soft booking trends and increased cancellations related to the global spread of the coronavirus (Covid-19)," stated Pete Trombetta, a Moody's lodging and cruise analyst in a press release.

"While the cruise industry has seen past cyclical downturns including recession and terrorist attacks, the Covid-19 coronavirus will pressure the cruise companies' earnings and liquidity to a degree we haven't seen before," added Trombetta.

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