S&P drops Enviva to D

S&P said it downgraded its ratings for Enviva Inc. to D from CCC- and its senior unsecured debt to D from CC.

Enviva skipped the $24.4 million interest payment that was due by Thursday, the end of the 30-day grace period.

“The downgrade reflects Enviva's failure to make its interest payment of a substantial portion of its outstanding debt, which we consider to be a general default. Enviva's previously disclosed contract modifications are expected to result in significant losses and poor liquidity. We view its capital structure as unsustainable and believe the company is considering strategic alternatives and expect the outcome of these discussions will result in a significant debt restructuring or bankruptcy filing,” S&P said in a press release.

Fitch downgrades Enviva

Fitch Ratings said it downgraded Enviva Inc.'s long-term issuer default rating to RD, restricted default, from C and affirmed its senior unsecured debt at C/RR5.

The downgrade follows Enviva's failure to cure the missed interest payment on its $750 million of 6½% senior notes due 2026 upon expiration of its original 30-day grace period, Fitch said.

The company entered into a forbearance agreement with its lenders, bondholders and noteholders holding the requisite amount of principal amount outstanding or committed under the applicable facilities. The forbearance agreement ends on March 4 unless extended.

“Fitch expects the company to run out of liquidity by 2025 given current earnings and cash flows and believes debt restructuring is likely, absent success in renegotiating existing contracts with customers, as it seeks a new strategic plan ahead of its $750 million bond maturity in 2026,” the agency said in a press release.

S&P cuts Vue

S&P said it downgraded its ratings for Vue Entertainment International Ltd. to SD, selective default, from CC and its €649 million senior term loan B due December 2027 to D from CC. The agency, however, affirmed the CCC rating on Vue’s €95 million super-senior facility due June 2027.

Vue completed its restructuring on Feb. 20 after getting all its lenders to consent and the downgrade reflects the transaction.

The transaction includes a partial debt-for-equity swap on the €649 million senior term loan B due December 2027, and the reclassification of part of its outstanding balance into a 1.5 lien facility, also due December 2027. Vue also will issue a new £54 million euro-equivalent super senior money facility that will rank equally with the outstanding €95 million super senior facility, both due June 2027. The issuance will provide proceeds of about £50 million that the group will use for general corporate purposes and to support near-term liquidity needs.

S&P said it considers the deal equivalent to default because lenders are getting less than they were originally promised. The agency plans to reevaluate Vue’s ratings over the next few days.

Fitch cuts, then raises Clisa

Fitch Ratings said it downgraded Compania Latinoamericana de Infraestructura & Servicios SA's (Clisa) long-term local-currency and foreign-currency issuer default ratings to RD, restricted default, from C after the company completed its consent solicitation to amend the terms of its coupon payment due Jan. 25, 2024.

“The completion of the consent solicitation represents a restricted default under Fitch's distressed debt exchange (DDE) criteria. This is evidenced by a material reduction in the terms of payment for the coupon subject to this consent solicitation compared to its original contractual terms. In Fitch's view, the change in terms had the intent of avoiding default and impairs the position of non-participating bondholders,” the agency said in a press release.

Fitch said it then raised Clisa’s IDRs to CC from RD and the senior secured debt-class rating to CC/RR4 from C/RR4.

“The ratings reflect Fitch's view that a default of some kind remains highly probable as the company's liquidity position remains very weak and the operating environment in Argentina continues to be challenging,” the agency said.

Fitch lowers GoTo Group

Fitch Ratings said it downgraded LMI Parent, LP's and its subsidiary, GoTo Group, Inc.'s long-term issuer default ratings to C from CCC- and removed them from rating watch negative.

Per Fitch's criteria, it moved the IDR to the C rating following the company's agreement with lenders to exchange nearly all its outstanding $882 million of first-lien term loans and first-lien notes. The exchange is expected to close on March 4.

This exchange is the company’s second distressed debt exchange.

After the DDE, Fitch said it expects to downgrade the IDRs to RD, Restricted Default, and reassess the rating based on the final capital structure.

Fitch said it affirmed the new first-lien first-out revolver, term loans and notes ratings at B-/RR1. The new first-lien second out-term loan and notes are rated CCC/RR3 and remain on RWN given the likelihood of the recovery rating being lowered to RR5 when the second DDE closes. The agency also affirmed the previously existing first-lien term loan and notes at C/RR6 and removed the RWN now that the exchange has been agreed to.

Moody’s lowers Lumen

Moody's Investors Service said it downgraded Lumen Technologies, Inc.'s corporate family rating to Caa2 from Caa1 and its probability of default rating to Caa2-PD from Caa1-PD. The agency also downgraded Lumen's backed senior secured bank credit facilities and senior secured note ratings to Caa3 from Caa2 and its senior unsecured notes rating to Ca from Caa3.

The agency also lowered Level 3 Financing, Inc.'s backed senior secured notes and senior secured bank credit facility ratings to B3 from B1 and its backed senior unsecured notes rating to Caa2 from B3 and Qwest Corp.'s senior unsecured rating to Caa3 from B3.

Finally, the agency revised the outlook for Lumen, Level 3 and Qwest to stable from negative.

“The CFR downgrade reflects Lumen's continued weak operating performance and medium to longer-term refinancing risks. While Moody's believes that the exchange offer under consideration if successfully completed will provide Lumen with near-term financial flexibility, it does not resolve the company's longer-term refinancing risks,” the agency said in a statement.

The stable outlook reflects the company’s improved short-term liquidity and an expectation for modest free cash flow generation for the full year 2024 and 2025, Moody’s said.

S&P downgrades Robertshaw

S&P said it lowered its ratings for Robertshaw US Holding Corp. (Range Parent Inc.) to D from CCC-, its first-out term loan to D from CCC+ and its second-out, third-out, fourth-out and fifth-out term loans to D from C.

The downgrade follows Robertshaw reporting on Thursday that it filed for protection under Chapter 11 of the U.S. Bankruptcy Code, the agency said.

“Robertshaw entered into a restructuring support agreement with a significant portion of its current lending group. The company intends to finance its operations throughout Chapter 11 proceedings with cash on hand and access to an approximately $55 million, new money debtor-in-possession financing facility, subject to bankruptcy court approval,” S&P said in a press release.

Moody’s slices Robertshaw

Moody's Investors Service said it downgraded Robertshaw US Holding Corp.'s probability of default rating to D-PD from Ca-PD.

However, the agency said it affirmed the company's Ca corporate family rating and the first-out and second-out senior secured bank credit facilities under Robertshaw's super-priority credit agreement at Caa1 and Ca, respectively. Additionally, Moody’s affirmed the Ca ratings on the super-priority third-out, fourth-out and fifth-out senior secured bank credit facilities, and the C ratings on the company's first-lien and second-lien term loans.

The downgrade follows Robertshaw filing announcing on Thursday that it filed for protection under Chapter 11 of the U.S. Bankruptcy Code, the agency said. The company also entered a restructuring support agreement with a group of partners who have put forward a stalking horse bid to lower debt and solicit other offers.

Moody’s added it plans to withdraw all its ratings for the company.

The outlook remains negative.

S&P trims TriNet Group

S&P said it lowered TriNet Group Inc.’s issuer rating to BB from BB+. The unsecured note rating at BB is unchanged.

TriNet said it plans to support company-adjusted leverage of 1.5x-2x. It also announced plans to buy back an extra $1 billion in stock in fiscal 2023.

“The downgrade reflects our expectation that TriNet's leverage will increase to the mid-2x area following its new stated financial policy. The company updated its target leverage ratio to 1.5x-2x, which equates to S&P Global Ratings-adjusted leverage of about 2x-2.5x. In addition, the company announced a capital deployment strategy to return 75% of operating cash flow to shareholders. We believe TriNet will likely issue incremental debt and use generated cash flow to fund a $1 billion stock repurchase program,” S&P said in a press release.

The outlook is stable.

Fitch turns Alam Sutera view to negative

Fitch Ratings said it revised the outlook on PT Alam Sutera Realty Tbk. (ASRI) to negative from stable and affirmed its long-term issuer default rating at B-.

“The negative outlook reflects the underperformance in ASRI's presales, which, if sustained, could weaken liquidity and raise financing risk on the company's $251 million secured notes due November 2025. We expect a slow recovery in presales, supported by the company's marketing efforts and the value-added-tax (VAT) rebate announced last year, which is effective through to end-2024,” Fitch said in a press release.

The agency said it expects presales, excluding land sales to developers, to stay below Rp 2 trillion over the next 12 months. This is a level below which Fitch said it may consider negative rating action. However, it forecasts presales to recover to Rp 2.1 trillion in 2025 and Rp 2.2 trillion in 2026.

S&P assigns B to Triton Water loan

S&P said it assigned B issue-level and 3 recovery ratings to Triton Water Holdings Inc.’s planned $300 million term loan. The 3 rating indicates meaningful recovery (50%-70%; rounded estimate 55%) in default.

“We also affirmed our B issue-level rating on the existing first-lien term loan with a 3 recovery rating and CCC+ rating on the senior unsecured notes with a recovery rating of 6 indicating our expectation for negligible (0%-10%; rounded estimate 0%) recovery in the event of a payment default,” S&P said in a press release.

Triton plans to use the loan to pay a dividend to its sponsor.

The outlook is stable.

Fitch rates Samarco, notes B-

Fitch Ratings said it assigned B- long-term foreign- and local-currency issuer default ratings to Samarco Mineracao SA em Recuperacao Judicia and B-/RR4 ratings to its senior unsecured notes due 2031. The outlook is stable.

“Samarco's ratings reflect the company's post-restructuring credit profile, with still high leverage levels, limited financial flexibility and execution risks related to the ramp-up of its operations. The analysis also incorporates that the financial and legal strain coming from the 2015 Mariana dam incident is currently mitigated by the $1 billion cap to Samarco, as per the restructuring plan these risks were transferred to the shareholders,” Fitch said in a press release.

The judicial process shaved Samarco’s total debt to $7.7 billion from $11.4 billion.

“Samarco plans to resume its full capacity of 30 million tons of iron ore pellets in 2028 (phase 3) from 18 million in 2025 (phase 2) and 9 million in 2023 (phase 1). The construction of a sandy tailings filtering plant and improvements in the concentrators are needed. Dry tailings piling will be used without the operation of upstream dams while heightening attention to the safety of geotechnical structures and to the de-characterization of the Germano mining pit and dam will continue,” Fitch said.

Moody’s assigns Samarco, notes B3

Moody's Investors Service said it assigned a B3 corporate family rating to Samarco Mineracao SA and to its $3.9 billion senior unsecured notes due 2031. The outlook is stable.

“The B3 ratings of Samarco Mineracao SA (Samarco) reflect Samarco's capital structure resulting from the judicial recovery. The terms approved under the judicial recovery allowed Samarco to materially reduce debt levels and direct cash flows to the full ramp-up of its operations, which the company expects to achieve through 2028.

“The B3 ratings also reflect the operational constraints and financial liabilities Samarco faces as a consequence of the Fundao dam disaster in November 2015, which led to the full interruption of operations through end of 2020 and significant liabilities under the so-called Framework Agreement established in 2016,” Moody’s said in a press release.

The new ratings follow the U.S. Bankruptcy Court for the Southern District of New York approving the company’s Chapter 15 proceeding on Oct. 10, Moody’s said.

Samarco issued $3.7 billion in 9% senior unsecured notes due 2031, which were exchanged for the previous notes due 2022, 2023 and 2024, and an additional $259.6 million in 9% senior unsecured notes owed to Samarco's shareholders.

“The stable outlook reflects Moody's expectations that Samarco will conclude the implementation of the debt restructuring according to the judicial recovery plan, while the company continues to invest for the ramp-up of its operations, with the start-up of its second concentrator in 2025 and the third concentrator in 2028,” the agency said.

Moody’s rates Triton loan B2

Moody’s Investors Service said it assigned a B2 rating to Triton Water Holdings Inc.'s new $300 million first-lien incremental senior secured term loan. The agency also changed the outlook to positive from stable.

Moody’s said it concurrently affirmed Triton’s B3 corporate family rating, B3-PD probability of default rating, B2 existing senior secured first-lien term loan rating, and Caa2 senior unsecured notes rating.

The loan will be used to fund a distribution to shareholders of about $300 million. “Moody's views the dividend as credit negative because it evidences an aggressive financial policy that prioritizes shareholder distributions to its financial sponsor at the expense of creditors. However, even with the additional debt, Moody's expects that leverage will peak in the low to mid 5x range, which is well below historical levels,” the agency said in a press release.

The agency noted, “The company benefits from positive secular trends for consuming clean water, a diverse customer base, leading market position, and leading regional brands in the US retail bottled water category which continue to grow. For these reasons, Moody's changed the rating outlook to positive from stable.”

Moody's slashes Cidron Gloria

Moody's Investors Service said it downgraded Cidron Gloria Holding GmbH's (GHD) long-term corporate family rating to Caa2 from B3 and its probability of default rating to Caa2-PD from B3-PD. Concurrently, the agency cut to Caa2 from B3 the rating of the €360 million backed senior secured term loan B maturing in August 2026 and the rating of the €80 million backed senior secured revolving credit facility due in February 2026, both issued by GHD Verwaltung GesundHeits GmbH Deutschland, a subsidiary of GHD. The outlook on both entities was changed to stable from negative.

“The downgrade is indicative of GHD's consistently weak credit metrics, including a high Moody's adjusted debt to EBITDA ratio of 9.5x, a poor interest coverage ratio of 0.9x, and limited free cash flow generation as of the end of December 2023. The company's 2023 performance demonstrated slower-than-anticipated recovery in the homecare division as well as limited margin improvement due to continued cost pressure,” the agency said in a statement.

Additionally, Moody’s noted it considers GHD’s capital structure as unsustainable.

However, “The stable outlook weighs the company's efforts to enhance operating performance against its weakening liquidity position and the heightened risk of default,” the agency said.

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