/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/200424.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, April 24, 2020, Vol. 24, No. 114 Headlines 1236904 BC: Moody's Cuts CFR to Caa1 & Alters Outlook to Negative 400 WEST 23RD: Seeks to Hire Morrison Tenenbaum as Counsel AAG FH: Moody's Alters Outlook on B2 CFR to Negative ABB/CON-CISE OPTICAL: Moody's Alters Outlook on Caa1 CFR to Neg. ACCURIDE CORP: Bank Debt Trades at 57% Discount ADIENT US: Moody's Rates New Senior Secured Note 'Ba3' AIRNET TECHNOLOGY: Has Until Dec. 10 to Regain Nasdaq Compliance AL AMJADY: $750K Sale of Elizabeth Property Denied as Moot ALASDAIR ANDREW FRASER: $2.9M Sale of Scotssdale Property Approved ALLIANT HOLDINGS: Moody's Rates $300MM Sr. Unsec. Notes 'Caa2' AMC ENTERTAINMENT: S&P Rates New $500MM Senior Secured Notes CCC+ AMCP CLEAN: Bank Debt Trades at 59% Discount AMERICAN TELECONFERENCING: Bank Debt Trades at 43% Discount AMMON DAVID WEBER: Proposed Sale of Borger Property Approved AMYNTA AGENCY: Bank Debt Trades at 17% Discount ANASTASIA PARENT: Bank Debt Trades at 58% Discount ANCHOR GLASS: Bank Debt Trades at 58% Discount AP GAMING I: Moody's Rates $80MM Incremental Term Loan 'B3' APC AUTOMOTIVE: Bank Debt Trades at 70% Discount ARAMARK SERVICES: Moody's Cuts CFR to Ba3, Outlook Stable ARRAY CANADA: Bank Debt Trades at 48% Discount ARROW BIDCO: Moody's Cuts CFR to B3 & Sr. Sec. Rating to Caa1 ARUBA INVESTMENTS: Bank Debt Trades at 17% Discount ATLANTIC AVIATION: Moody's Cuts CFR & Sr. Secured Rating to B2 AWAZE LTD: Bank Debt Trades at 48% Discount BCP RAPTOR II: Bank Debt Trades at 51% Discount BI-LO LLC: Moody's Hikes CFR to B2 & Sr. Secured Rating to B3 BIZ AS USUAL: Seeks Court Approval to Employ Accountant BMC ACQUISITION: Bank Debt Trades at 18% Discount BRAVE PARENT: Bank Debt Trades at 17% Discount BRIXMOR PROPERTY: Moody's Affirms (P)Ba2 on Preferred Shelf Stock BUILDERS FIRSTSOURCE: Moody's Alters Outlook on B1 CFR to Stable BVI MEDICAL: Moody's Alters Outlook on B3 CFR to Stable BW NHHC: Bank Debt Trades at 43% Discount CALIFORNIA PIZZA: Bank Debt Trades at 58% Discount CAPITAL AUTOMOTIVE: Bank Debt Trades at 17% Discount CAROUSEL CENTER PROJECT: Moody's Cuts PILOT Revenue Bonds to Ba3 CAST & CREW: S&P Downgrades ICR to 'B-'; Outlook Negative CDS US: Bank Debt Trades at 57% Discount CEC ENTERTAINMENT: Moody's Cuts CFR to Caa3, Outlook Negative CEDAR FAIR: Moody's Rates New $875MM Senior Secured Notes 'Ba2' CENTRAL SECURITY: Bank Debt Trades at 58% Discount CENTRALSQUARE TECHNOLOGIES: Bank Debt Trades at 17% Discount CENTURION PIPELINE: Moody's Cuts Rating on $350MM Term Loan to B1 CHECKERS HOLDINGS: $193M Bank Debt Trades at 43% Discount CHECKERS HOLDINGS: $88M Bank Debt Trades at 53% Discount CHECKOUT HOLDING: Bank Debt Trades at 62% Discount CHESAPEAKE ENERGY: Bank Debt Trades at 58% Discount CHIFLEZ CORP: Unsecureds Unimpaired Under Plan CIAOBABYONMAIN LLC: Wants Until July 6 to File Plan COLOGIX HOLDINGS: Bank Debt Trades at 17% Discount COOL HOLDINGS: Secures $3.1 Million Loan Under CARES Act CREATIVE HAIRDRESSERS: Case Summary & 20 Top Unsecured Creditors CREATIVE HAIRDRESSERS: Enters Chapter 11 to Sell to Tacit Salon CSI COMPRESSCO: Moody's Cuts CFR to Caa1 & Alters Outlook to Neg. CSTN MERGER SUB: Moody's Cuts CFR & Senior Secured Rating to 'B3' CYTOSORBENTS CORP: FDA Grants Breakthrough Designation to CytoSorb CYTOSORBENTS CORP: Hikes Stock Offering by Additional $25M Shares CYXTERA DC: Bank Debt Trades at 65% Discount DANA INC: S&P Lowers Term Loan B Rating to 'BB+' Following Add-On DIAMONDBACK INDUSTRIES: Seeks Chapter 11 Protection DIRECTORY DISTRIBUTING: Unsecureds Unimpaired Under Plan DISTRIBUTION INTERNATIONAL: S&P Alters Outlook to Negative DJL BUILDERS: Unsecured Creditors to Recover 3% in Plan DPW HOLDINGS: Court Preliminarily OKs Derivative Suit Settlement DYNASTY ACQUISITION: S&P Lowers ICR to 'B-' on Lower Air Traffic E MECHANIC PLUS: Unsecureds to Get Distributions in Plan ELEMENT SOLUTIONS: S&P Affirms 'BB-' ICR, Alters Outlook to Neg. ELEVATE TEXTILES: Bank Debt Trades at 59% Discount ELEVATE TEXTILES: S&P Downgrades ICR to 'CCC+'; Outlook Negative ENCINO ACQUISITION: Bank Debt Trades at 53% Discount ENSIGN DRILLING: S&P Downgrades ICR to 'CCC+'; Outlook Negative FENDER MUSICAL: Moody's Alters Outlook on B1 CFR to Negative FGI ACQUISITION: Bank Debt Trades at 18% Discount FIELDWOOD ENERGY: Bank Debt Trades at 68% Discount FITNESS INTERNATIONAL: S&P Downgrades ICR to 'CCC+'; Outlook Dev. FLEXENTIAL INTERMEDIATE: Bank Debt Trades at 61% Discount FOOT LOCKER: S&P Alters Outlook to Negative, Affirms 'BB+' ICR FORD MOTOR: S&P Rates New Unsecured Notes BB+; Rating on Watch Neg. FRANKLIN SQUARE: Moody's Alters Outlook on Ba1 CFR to Negative FREEDOM TRUCKING: Seeks Court Approval to Hire Bankruptcy Attorney FXI HOLDINGS: Moody's Cuts CFR to 'B3', Outlook Negative GENUINE FINANCIAL: Bank Debt Trades at 18% Discount GINN-LA QUAIL: Bank Debt Trades at 97.8% Discount GO WIRELESS: Moody's Puts B2 CFR on Review for Downgrade GOLD STANDARD: Bank Debt Trades at 64% Discount GRABIT INC: Court Confirms Reorganization Plan GROUP 1 AUTOMOTIVE: Moody's Alters Outlook on Ba1 CFR to Negative GULF FINANCE: Bank Debt Trades at 47% Discount HALO BUYER: Bank Debt Trades at 17% Discount HANJIN INTERNATIONAL: S&P Cuts ICR to CCC+ on Worsening Liquidity HANNON ARMSTRONG: Fitch Corrects April 15 Ratings Release HENLEY PROPERTIES: $400K Sale of Winslow Property Approved HOLOGENIX LLC: Case Summary & 16 Unsecured Creditors HOYA MIDCO: S&P Lowers ICR to B-; Ratings Remain on Watch Negative HUNT OIL: Moody's Withdraws B3 Issuer Rating on Data Inadequacy IMAGINE! PRINT: $385MM Bank Debt Trades at 79% Discount INNOVATIVE WATER: $100M Bank Debt Trades at 44% Discount INNOVATIVE WATER: $360M Bank Debt Trades at 48% Discount INPIXON: Raises $1.89 Million Through Common Stock Offering INSTALLED BUILDING: Moody's Alters Outlook on B1 CFR to Stable INTERNAP TECHNOLOGY: Taps Moelis & Company as Financial Advisor IPC CORP: Bank Debt Trades at 42% Discount IQOR US: Bank Debt Trades at 71% Discount JAPAN INVESTMENT: Seeks to Hire Eric A. Liepins as Legal Counsel JO-ANN STORES: Bank Debt Trades at 64% Discount K&N PARENT: Bank Debt Trades at 48% Discount KAISER ALUMINUM: S&P Alters Outlook to Negative, Affirms BB+ ICR KEN GARFF: Moody's Places Ba2 CFR on Review for Downgrade KENAN ADVANTAGE: Bank Debt Trades at 18% Discount KESTREL BIDCO: Bank Debt Trades at 18% Discount KLOECKNER PENTAPLAST: Bank Debt Trades at 17% Discount KNB HOLDINGS: Moody's Cuts CFR & Senior Secured Rating to Caa3 KNB HOLDINGS: S&P Cuts ICR to 'CCC-' on Deteriorating Liquidity KOPPERS HOLDINGS: S&P Lowers ICR to 'B'; Outlook Negative KRATON CORP: S&P Alters Outlook to Negative, Affirms 'B+' ICR KRS GLOBAL: Gets Interim Approval to Hire Shraiberg as Counsel LADDER CAPITAL: Fitch Alters Outlook on BB+ LT IDR to Negative LADDER CAPITAL: S&P Places 'BB-' ICR on Watch Negative LANAI HOLDINGS III: Moody's Cuts CFR to Caa2, Alters Outlook to Neg LEAWOOD PROPERTIES: $535K Sale of Leawood Office Condo Unit 150 OKd LEONID LEVITSKY: $525K Sale of Englewood Property Approved LIFE TIME: S&P Cuts ICR to 'CCC+' on Pandemic-Related Closures LIGADO NETWORKS: Bank Debt Trades at 62% Discount LIGHTSTONE HOLDCO: S&P Lowers Senior Secured Debt Rating to 'B+' LJ RUBY: S&P Downgrades ICR to 'B-' on Expected Lower Demand LONGVIEW INTERMEDIATE: Moodys' Cuts Rating on $286.5MM Loan to C LSF9 ATLANTIS: Moody's Alters Outlook on B2 CFR to Negative LUCID ENERGY: $950M Bank Debt Trades at 42% Discount LUCID ENERGY: Bank Debt Trades at 42% Discount MILK SPECIALTIES: Bank Debt Trades at 17% Discount MISTER CAR WASH: S&P Upgrades ICR to 'CCC+'; Outlook Negative MONTREIGN OPERATING: Moody's Withdraws Caa3 CFR on Debt Repayment MRO HOLDINGS: Moody's Lowers CFR to Caa1, Outlook Negative MURRAY METALLURGICAL: $750K Sale of All Murray Maple Assets OK'd NATALIA BEVZ: $525K Sale of Englewood Property to Livinglyush OK'd NATIONAL INTERGOVERNMENTAL: Bank Debt Trades at 17% Discount NAVISTAR INT'L: Moody's Rates $500MM Senior Secured Notes 'B2' NBG ACQUISITION: Bank Debt Trades at 45% Discount NCL CORP: S&P Cuts ICR to 'BB-'; Ratings Remain on Watch Negative NEW CONSTELLIS: Moody's Assigns B3 CFR on Financial Restructuring NEW MILLENNIUM: Bank Debt Trades at 66% Discount NMSC HOLDINGS: Bank Debt Trades at 44% Discount NOBLE CORP: S&P Downgrades ICR to 'CCC-'; Outlook Negative NORTH AMERICAN LIFTING: Bank Debt Trades at 67% Discount NORTHSTAR FINANCIAL: Bank Debt Trades at 17% Discount NORTHWEST HARDWOODS: S&P Cuts ICR to 'CCC-'; Outlook Negative NPC INTERNATIONAL: Bank Debt Trades at 63% Discount O'HARE FOUNDRY: Proposed Sale of Equipment Approved O-I GLASS: S&P Lowers ICR to 'B+' on Weak Demand; Outlook Negative OBITX INC: Board Sacks CEO Alex Mardikian Over Disagreement OBITX INC: Delays Filing of Annual Report Amid COVID-19 Pandemic OBITX INC: Newly-Appointed CEO Acquires 150,000 Preferred Shares OCEAN POWER: Nasdaq Extends Compliance Deadline Until Nov. 13 ODYSSEY LOGISTICS: Bank Debt Trades at 16% Discount OSUM PRODUCTION: S&P Alters Outlook to Negative, Affirms CCC+ ICR PACIFIC DRILLING: S&P Downgrades ICR to 'CCC-'; Outlook Negative PATRIOT CONTAINER: Bank Debt Trades at 17% Discount PAUL F. SMITH: Case Summary & 2 Unsecured Creditors PEABODY ENERGY: Moody's Lowers CFR & Sr. Secured Rating to B1 PEACE INC: Seek to Hire Golan Christie as Legal Counsel PENINSULA PACIFIC: S&P Lowers ICR to 'CCC+'; Outlook Negative PENNSYLVANIA ECONOMIC: Fitch Cuts Ratings to 'BB' on Coronavirus PENSKE AUTOMOTIVE: Moody's Alters Outlook on Ba1 CFR to Negative PERMIAN PRODUCTION: Moody's Withdraws B3 CFR on Data Inadequacy PFS HOLDING: Bank Debt Trades at 61% Discount PINNACLE REGIONAL: Trustee Seeks to Hire Stinson LLP as Counsel PINNACLE REGIONAL: Trustee Seeks to Hire Woods Aitken as Counsel PLAYPOWER INC: Moody's Alters Outlook on B3 CFR to Negative PMHC II: Bank Debt Trades at 58% Discount PRIME CELEBRATION: Seeks to Hire Eric A. Liepins as Legal Counsel PUBLIC BIKES: Seeks to Hire Banchero Law Firm as Special Counsel PUBLIC BIKES: Seeks to Hire St. James Law as Legal Counsel PULMATRIX INC: Michael Higgins Succeeds Mark Iwicki as Chairman PURE FISHING: Moody's Cuts CFR to Caa2 & Alters Outlook to Stable PYXUS INT'L: Moody's Cuts Corp. Family Rating to Ca, Outlook Stable RECESS HOLDINGS: Bank Debt Trades at 18% Discount RECESS HOLDINGS: Moody's Alters Outlook on B3 CFR to Negative RESOLUTE FOREST: Moody's Lowers CFR to B1 & Alters Outlook to Neg. RESTAURANT TECHNOLOGIES: Moody's Alters Outlook on B2 CFR to Neg. REVLON CONSUMER: Bank Debt Trades at 50% Discount REVLON CONSUMER: Bank Debt Trades at 50% Discount SALLY HOLDINGS: Moody's Rates New Senior Secured Notes 'Ba2' SAVAGE ENTERPRISES: Moody's Alters Outlook on B1 CFR to Negative SEAWORLD PARKS: Moody's Rates New $227.5MM Sec. Notes Due 2025 'B3' SECURUS TECHNOLOGIES: Bank Debt Trades at 51% Discount SEMINOLE HARD: Moody's Cuts CFR to Ba3, On Review for Downgrade SIMBECK INC: Wants Until July 10 to File Reorganization Plan SITEONE LANDSCAPE: Moody's Alters Outlook on B1 CFR to Stable SIWF HOLDINGS: S&P Lowers ICR to 'B-' on Expected Lower Demand SJV INC: $630K Sale of Liquor License Approved SONOMA PHARMACEUTICALS: To Close its Petaluma Facility This Summer SPEEDCAST INTERNATIONAL: Case Summary & 30 Top Unsecured Creditors SPEEDCAST INTERNATIONAL: To Recapitalize Under Chapter 11 STARFISH HOLDCO: S&P Alters Outlook to Negative, Affirms 'B-' ICR STARION ENERGY: Court Approves Disclosure Statement STORMBREAK RANCH: Unsecured to Recover 100% in Plan SUMMIT MIDSTREAM: Moody's Lowers CFR to B2, Outlook Negative SUNGARD AS: Bank Debt Trades at 69% Discount SUNOPTA INC: Oaktree Capital, et al. Report 19.5% Equity Stake SYNIVERSE HOLDINGS: Bank Debt Trades at 61% Discount TAPSTONE ENERGY: Moody's Withdraws Ca CFR on Debt Restructuring THOMPSON PUBLISHING: Bank Debt Trades at 54% Discount TOPGOLF INT'L: Bank Debt Trades at 18% Discount TOWN SPORTS: Moody's Lowers CFR to Ca, Outlook Stable TRANSCENDIA HOLDINGS: Moody's Cuts CFR to Caa1, Outlook Stable TRICO GROUP: S&P Alters Outlook to Negative, Affirms 'B' ICR TUTOR PERINI: Fitch Alters Outlook on B+ IDR to Negative UNIVISION COMMUNICATIONS: Moody's Rates $360MM Sr. Sec. Notes 'B2' USR PARENT: Bank Debt Trades at 17% Discount WIRECO WORLDGROUP: Moody's Cuts CFR to Caa1, Outlook Negative WIREPATH HOME: Bank Debt Trades at 17% Discount WOK HOLDINGS: Bank Debt Trades at 51% Discount YUMA ENERGY: Questionnaires on Committee Formation Due on April 24 ZEP INC: Bank Debt Trades at 55% Discount [*] S&P Alters Outlook on Debt Ratings of Local Gov'ts to Stable [^] BOOK REVIEW: BOARD GAMES - Changing Shape of Corporate Power ********* 1236904 BC: Moody's Cuts CFR to Caa1 & Alters Outlook to Negative ----------------------------------------------------------------- Moody's Investors Service downgraded 1236904 B.C. Ltd.'s (dba "Aptos") Corporate Family Rating to Caa1 from B3, Probability of Default Rating to Caa1-PD from B3-PD, and its senior secured first lien credit facility (revolver and term loan) rating to Caa1 from B3. The outlook was changed to negative from stable. The downgrade reflects Moody's expectation for a sharp decline in Aptos' earnings and cash flows in 2020 due to the Coronavirus (COVID-19) pandemic and its exposure to the retail sector, which is currently facing considerable stress. Though there is significant uncertainty about the steepness of the economic decline and the strength of a likely recovery that could follow, Moody's believes that the extraordinary circumstance around temporary store closures, stay-at-home orders and travel restrictions will trigger a severe pull back in consumer spending, which will cascade into weaker demand for Aptos' products over the next 12-15 months. Downgrades: Issuer: 1236904 B.C. Ltd. Corporate Family Rating, Downgraded to Caa1 from B3 Probability of Default Rating, Downgraded to Caa1-PD from B3-PD Senior Secured Bank Credit Facility, Downgraded to Caa1 (LGD4) from B3 (LGD4) Outlook Actions: Issuer: 1236904 B.C. Ltd. Outlook, Changed To Negative From Stable RATINGS RATIONALE The Caa1 CFR reflects Aptos' already high debt-to-EBITDA leverage (Moody's adjusted) in the mid-8x range as of December 31, 2020 and that limited cash flow generation could be stressed in the near-term given anticipated operating challenges. New bookings along with professional service fees and license revenue are expected to drop off sharply over the next several quarters and will remain weak for the remainder of 2020. Concerns around liquidity tightening throughout 2020 is elevated given the weak earnings and slower expected cash collection periods. Moody's believes the company has already put in place a plan to reduce operating expenses to preserve near-term liquidity. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. Aptos sells its software solutions predominantly to the retail sector which has been most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Aptos' credit profile, including its exposure to widespread store closures and ongoing liquidity challenges for many retailers, have left it vulnerable to these unprecedented operating conditions, and Aptos remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Aptos of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Additionally, the company's financial policy, which includes high financial leverage, is a key governance consideration under Moody's ESG framework. The negative outlook reflects Moody's expectation for weakening operating performance and liquidity stemming from the COVID-19. The negative outlook also reflects uncertainty surrounding the depth and duration of the outbreak and Aptos' ability to quickly adjust cost and maintain at least adequate liquidity. Moody's expects Aptos to maintain adequate liquidity over the next 12-15 months, but liquidity is at risk for deterioration depending on the duration of the pandemic and the pace of recovery. Sources of liquidity consist of projected balance sheet cash of approximately $30-35 million at March 31, 2020, including a partial draw under its $40 million revolving credit facility due 2025. The potential for negative free cash flow over the next several quarters is heightened given the current economic conditions. There are no financial maintenance covenants under the first lien term loan but the revolving credit facility is subject to a springing net first lien leverage ratio of 7.35x if the amount drawn exceeds 35% of the revolving credit facility. Moody's expects that projected EBITDA deterioration will increase the risk of a potential covenant breach over the near term. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if operating results deteriorate beyond Moody's expectations with debt-to-EBITDA (Moody's adjusted) sustained above 10.0x, free cash flow remains negative, or the probability of default increases. The ratings could be upgraded if Aptos' operating results and free cash flow generation improve driven by sustained organic revenue growth and margin expansion, if debt-to-EBITDA is sustained below 8.5x and at least adequate liquidity is maintained. Aptos, Inc. (formerly Retail Solutions Group, Inc. or Epicor RSG) is a leading provider of retail software solutions including point of sale software for mid-market retail. Following the completion of the leveraged buyout, Aptos is majority owned by Goldman Sachs Merchant Banking Division, with remaining shares held by management. The company generated annual revenue of approximately $200 million in fiscal 2019. 400 WEST 23RD: Seeks to Hire Morrison Tenenbaum as Counsel ---------------------------------------------------------- 400 West 23rd Street Restaurant Corp. seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to employ Morrison Tenenbaum, PLLC as its counsel. The firm will provide these services in connection with the Debtor's Chapter 11 case: (a) advise the Debtor with respect to its powers and duties as debtor-in-possession in the management of its estate; (b) assist in any amendments of Schedules and other financial disclosures and in the preparation/review/amendment of a disclosure statement and plan of reorganization; (c) negotiate with the Debtor's creditors and take the necessary legal steps to confirm and consummate a plan of reorganization; (d) prepare on behalf of the Debtor all necessary motions, applications, answers, proposed orders, reports and other papers to be filed by the Debtor in this case; (e) appear before the Bankruptcy Court to represent and protect the interests of the Debtor and its estate; and (f) perform all other legal services for the Debtor that may be necessary and proper for an effective reorganization. The attorneys and paraprofessionals designated to represent the Debtor-in-possession will be paid at these hourly rates: Lawrence F. Morrison $525 Brian J. Hufnagel $425 Associates $380 Paraprofessionals $175 On or about February 27, 2020, the firm received $15,000 as an initial retainer fee from the Debtor. The firm requests that the retention be effective as of the petition date, March 5, 2020, as the firm has been rendering services to the Debtor since the filing. Lawrence F. Morrison, Esq., an attorney at Morrison Tenenbaum PLLC, disclosed in court filings that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Lawrence F. Morrison, Esq. Brian J. Hufnagel, Esq. MORRISON TENENBAUM PLLC 87 Walker Street, Floor 2 New York, NY 10013 E-mail: lmorrison@m-t-law.com bjhufnagel@m-t-law.com About 400 West 23rd Street Restaurant 400 West 23rd Street Restaurant Corp., an operator of a restaurant known as Rail Line Diner located at 400 SWest 23rd Street, New York, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 20-41379) on March 5, 2020, listing under $1 million in both assets and liabilities. The Hon. Elizabeth S. Stong oversees the case. The Debtor tapped Morrison Tenenbaum PLLC as its counsel. AAG FH: Moody's Alters Outlook on B2 CFR to Negative ---------------------------------------------------- Moody's Investors Service affirmed AAG FH LP's Corporate Family Rating of B2, probability of default rating of B2-PD and the B3 rating on its senior unsecured notes. The outlook was changed to negative from stable. "AAG's negative outlook reflects its current high leverage and the risk to deleveraging due to the impact of COVID-19, " stated Moody's Vice President Louis Ko. "We believe that AAG has adequate liquidity and a large variable cost base which allows it to mitigate the downside during the coronavirus period, which are key factors in the ratings affirmations." Affirmations: Issuer: AAG FH LP Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2-PD Senior Unsecured Regular Bond/Debenture, Affirmed B3 (LGD5) Outlook Actions: Issuer: AAG FH LP Outlook, Changed To Negative From Stable RATINGS RATIONALE AAG is constrained by: (1) its expectation that leverage (adjusted Debt/EBITDA) will be above 7x for the next 18 months before deleveraging post coronavirus; (2) execution risks around its car dealership acquisition growth strategy; (3) small revenue size relative to rated US auto retailing peers; and (4) likelihood that the economy be slow to recover from the effects of the coronavirus crisis which could impact new vehicle sales. However, the company benefits from: (1) favorable positions in its chosen markets (Ontario, Alberta, and Oregon); (2) resilient business model, with good contributions from parts and service and finance and insurance segments, which reduce reliance on new vehicle sales; (3) good vehicle brand diversity; and (4) EBITDA margin that is stronger than those of higher rated peers. AAG has adequate liquidity. Sources are approximately C$165 million compared to about C$8 million of cash usage over the next 12 months. In April 2020, AAG drew the full amount of its C$7.5 million revolving credit facility and retained the cash on its balance sheet, which is currently at C$25 million. Moody's expects AAG to generate C$20 million of free cash flow over the next 12 months, with approximately C$120 million of availability under its floorplan facilities and wholesale leasing facility. AAG's cash usage over the next 12 months includes C$8 million of scheduled payments under the vendor takeback notes. AAG's revolver is subject to a number of covenants including a combined current ratio at 1.05x, against which it estimates AAG will have at least 10% cushion over the next four quarters. AAG has limited flexibility to boost liquidity from asset sales. The negative outlook reflects the potential that the corona-based recession could be worse, and last longer, than currently expected, which could hinder AAG's ability to de-lever its balance sheet. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if adjusted debt/EBITDA is sustainable below 5.0x (6.9x for FY2021E), EBIT/Interest is above 2.0x (1.3x for FY2021E), and liquidity improves. The ratings could be downgraded if a prolonged period of negative free cash flow is expected, liquidity weakens, or leverage is expected to remain above 7x (6.9x for FY2021E) and EBIT/Interest falls below 1.0x (1.3x for FY2021E) by the end of fiscal 2021. Social considerations for AAG include the current coronavirus outbreak which has raised concerns over the health and safety of the general public, resulting in the closures of non-essential businesses in Ontario. This will have a significant negative impact on AAG's operating performance for FY2020. Additional considerations made for AAG include similar social and environmental risks related to the larger automotive ecosystem, due to consumer demand, global supply chain challenges, transportation of inventory, and the use and protection of consumer data. The governance considerations Moody's makes in AAG's credit profile include its ownership by its original founder who owns and controls 100% of the voting rights. However, its acquisition strategy could potentially lead to higher leverage from time to time. The rapid and widening spread of the coronavirus outbreak, the deteriorating global economic outlook, falling oil prices and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. New auto sales have been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. AAG is therefore impacted, and Moody's notes that the majority of its dealerships are located in Ontario, which is one of the provinces in Canada that is most affected by the coronavirus with the mandatory closures of all non-essential businesses, include automobile dealerships. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on AAG of the breadth and severity of the shock, the uncertainty around AAG's ability to de-lever its balance sheet and the deterioration in credit quality it has triggered. AAG, headquartered in Toronto, Ontario, Canada, is an auto retailer with 22 dealerships across North America. Revenue for the twelve months ended September 30, 2019 was about C$1.0 billion. Canada accounts for about 70% of revenue while the remaining 30% is from the US. ABB/CON-CISE OPTICAL: Moody's Alters Outlook on Caa1 CFR to Neg. ---------------------------------------------------------------- Moody's Investors Service affirmed ABB/CON-CISE Optical Group LLC's ("ABB/CON-CISE") ratings, including the Corporate Family Rating at Caa1, the Probability of Default Rating at Caa1-PD, the senior secured first lien credit facility rating at B3, and the senior secured second lien credit facility rating at Caa2. Moody's also assigned a B3 rating to the extended revolving credit facility due 2022. The outlook is revised to negative from stable. The change of outlook reflects Moody's expectations that demand for optical products will remain weak during the coronavirus pandemic, pressuring the credit profile by keeping financial leverage very high. In addition, the pace and timing of a recovery is highly uncertain. The affirmation of the Caa1 CFR reflects Moody's expectations that ABB/CON-CISE will maintain adequate liquidity profile, with flexibility to temporarily absorb negative cash flow from operations. The affirmation also considers that demand for the company's optical products will begin to recover as the pandemic eventually begins to ebb. Rating actions The following ratings were affirmed: ABB/CON-CISE Optical Group LLC Corporate Family Rating at Caa1 Probability of Default Rating at Caa1-PD Senior Secured First Lien term loan at B3 (LGD3) Senior Secured Second Lien credit facilities at Caa2 (LGD5) The following ratings were assigned: ABB/CON-CISE Optical Group LLC Senior Secured First Lien credit revolving credit facility due 2022 assigned at B3 (LGD3) The outlook was revised to negative from stable. RATINGS RATIONALE The Caa1 Corporate Family Rating reflects ABB/CON-CISE's very high financial leverage at 8.8 times for the LTM period ended September 30, 2019 and near-term pressure on profitability and cash flow due to the negative impact of the coronavirus pandemic on contact lens demand. Moody's anticipates that ABB/CON-CISE will experience a material decline in revenue due to closures of eye doctors' offices to support social distancing, notwithstanding the company's efforts to move some of its sales of optical products online. While the company is taking actions to adjust its cost base to lower revenue, Moody's expects operating profits and cash flow generation to be adversely affected in 2020. As a result, Moody's expect that ABB/CONCISE's financial leverage is unlikely to decrease in 2020. Significant uncertainties about the severity and duration of the coronavirus pandemic and the uncertain timeframe for easing social distancing make earnings impact difficult to quantify. The rating is supported by ABB/CON-CISE's leading scale and market position among US distributors of soft contact lenses and good diversity across customers and geographies. Moody's expects that ABB/CON-CISE will benefit from long term fundamentals of the optical industry, as well as increased technological innovation within the contact lens market. A weaker economic environment and some lingering disruptions in the healthcare sector will likely preclude these businesses from operating in 2021 at 100% of its pre-coronavirus expectations, but a significant rebound is still likely. Moody's anticipates that ABB/CONCISE's liquidity will remain adequate, supported by total liquidity (cash and undrawn credit facilities) of approximately $100 million. Despite the uncertainty over the company's ability to generate positive free cash flow in 2020, ABB/CON-CISE's sizeable cash balances relative to its fixed charges provide adequate support. Further, the company does not have any significant debt maturities until December 2022. However, ABB/CON-CISE has little headroom on its financial debt covenant reflecting current negative pressure on EBITDA. Moody's regards the coronavirus outbreak as a social risk under Moody's ESG framework, given the substantial implications for public health and safety. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. Although the healthcare distribution sector is less exposed from a demand standpoint than other sectors, reduced social interactions will reduce demand for some optical products. Environmental risks are not considered material to the overall credit profile of ABB/CON-CISE. Positive social considerations include growing demand for optical products reflecting the aging population, eye strain caused by the increased usage of computers and smaller mobile devices, and technological innovation which has expanded the appeal of the contact lens market. Governance considerations are material to ABB/CON-CISE's credit profile due to its private equity ownership which increases the risk of shareholder-friendly actions that come at the expense of creditors. The negative rating outlook reflects Moody's view that a prolonged decline in revenue and/or significant cash burn could result in an unsustainable capital structure. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Near term upward rating action is unlikely given the company's high financial leverage, small size and limited business-line and supplier diversity. Over the longer term, Moody's could upgrade the ratings if ABB/CON-CISE is able to increase its scale, improve its margin and cash flow profile, and sustain debt to EBITDA below 7.0 times. The ratings could be downgraded if there is a material deterioration in operating performance or liquidity or if the company's capital structure becomes unsustainable, raising refinancing risk. The principal methodology used in these ratings was Distribution & Supply Chain Services Industry published in June 2018. Headquartered in Coral Springs, Florida, ABB/CON-CISE Optical Group LLC is the largest distributor of soft contact lenses in the United States. ABB/CON-CISE also designs and manufactures customized contact lenses, and operates facilities in New York, Florida, Massachusetts, and California. The company is privately owned by financial sponsor, New Mountain Capital. ABB/CON-CISE generated revenues of roughly $1.5 billion. ACCURIDE CORP: Bank Debt Trades at 57% Discount ----------------------------------------------- Participations in a syndicated loan under which Accuride Corp is a borrower were trading in the secondary market around 43 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD363 million term loan is scheduled to mature on November 10, 2023. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. ADIENT US: Moody's Rates New Senior Secured Note 'Ba3' ------------------------------------------------------ Moody's Investors Service confirmed the ratings of Adient Global Holdings Ltd. including Corporate Family Rating at B2, the Probability of Default Rating at B2-PD, and the senior unsecured ratings at B3, Adient US LLC's senior secured facilities at Ba3; and assigned a Ba3 rating to Adient US LLC's new senior secured note. The Speculative Grade Liquidity Rating is SGL-2. The rating outlook is negative. This action concludes the review for downgrade initiated on March 25, 2020. Adient recently announced the issuance of $500 million in senior secured notes by its subsidiary, Adient US LLC, which will rank pari passu with its existing senior secured debt. The net proceeds of the notes will be used for general corporate purposes and is an important step to support Adient's liquidity profile. The following rating actions were taken: Ratings Confirmed: Issuer: Adient Global Holdings Ltd Corporate Family Rating, at B2 Probability of Default Rating, at B2-PD Senior Unsecured Regular Bond/Debenture, at B3 (LGD5) Issuer: Adient US LLC Senior Secured Bank Credit Facility, at Ba3 (LGD2) Senior Secured Regular Bond/Debenture, at Ba3 (LGD2) Outlook Actions: Issuer: Adient Global Holdings Ltd Outlook, Changed To Negative From Rating Under Review Issuer: Adient US LLC Outlook, Changed To Negative From Rating Under Review Speculative Grade Liquidity Rating Issuer: Adient Global Holdings Ltd Speculative Grade Liquidity Rating, remains SGL-2 Rating assigned: Issuer: Adient US LLC New Senior Secured Regular Bond/Debenture, at Ba3 (LGD2) The $1.25 billion asset based revolving credit facility is unrated by Moody's. RATINGS RATIONALE Adient's B2 CFR reflects the company's high financial leverage and the expected lower profits and cash flow because of declines driven by lower consumer automotive demand and automotive supply chain disruptions caused by the global coronavirus pandemic. Adient's 7.9x Debt/EBITDA (inclusive of Moody's adjustments and not including equity income) and 0.6x EBITA/interest for last twelve months ending December 31, 2019 are expected to deteriorate further through calendar year 2020. Partially mitigating this expectation is Adient's good liquidity profile which will be further bolstered from the net proceeds from the $500 million note issuance. The borrowing base availability under Adient's $1.25 billion asset based revolving credit facility will decline over the coming months as the receivables are collected, and the note proceeds will bridge liquidity until industry conditions recover, potentially through the back half of calendar year 2020. Adient should maintain its strong competitive position as a leading global supplier of automotive seating and related components, with regional and customer diversification, longstanding customer relationships and the earnings from its unconsolidated affiliates, albeit weakening. These positives are balanced with the company's high leverage, operational challenges, negative free cash flow, and cyclical automotive end-market demand. The negative outlook reflects Adient's ongoing weak credit metrics and the uncertainty around the timing of a recovery in global automotive production, and the steady state production level following the impact of the coronavirus pandemic. Adient's SGL-2 Speculative Grade Liquidity rating reflects the expectation of good liquidity through calendar year 2020 supported by strong cash balances. On March 26, 2020 Adient borrowed $825 million under the asset based revolving credit facility ('ABL' expiring May 2024), increasing cash to $1.79 billion pro forma for December 31, 2019 and reducing ABL availability to $175 million. Cash is somewhat lower at this time because of the negative cash flow to date. The $500 million note offering will add cash to bridge expected reductions in borrowing base availability under the ABL over the coming months, which could require some of the drawings to be repaid. Automotive production has essentially ceased in North America and Europe and is not expected to resume until early/mid May 2020, at which point receivables would increase, creating borrowing base capacity. Also, positively impacting Adient's liquidity are expected proceeds of $574 million by fiscal year-end September 2020 from the announced agreements to sell certain assets. The financial covenant under the ABL facility is a springing fixed charge coverage test, triggered when availability falls to greater of: 10% of the lesser of the commitment amount and the borrowing base; or $100 million. The senior secured term loan does not have financial maintenance covenants. With the recent draw under the ABL and the company's strong cash position, the ABL covenant is not expected to be triggered through 2020. Offsetting the relatively sizable cash position is the risk is Moody's estimate that Adient could generate negative free cash flow of at least $200 million for fiscal year 2020, given the recent suspension of operations at OEM manufacturing facilities around the world and additional headwinds from supply chain disruptions related to the coronavirus. Yet, this estimate is uncertain given the risk of further spreading of the virus and the uncertainty of the consumer's return to automotive show rooms. Adient enters into supply chain financing programs to sell accounts receivable without recourse to third-party financial institutions. Amounts under these programs were $165 million as of September 30, 2019. While not expected, if the company is unable to maintain and extend these receivable programs, additional borrowings under the revolving credit facility would be required to meet liquidity needs. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded with the expectation of material deterioration of automotive demand affecting cash flow, the loss of or meaningful decline in volume from a major customer, or if the company is unable to demonstrate progress improving operating performance over the next 12 months. A deterioration in liquidity or if Moody's expects weak free cash flow performance to worsen could also lead to a downgrade. An upgrade is unlikely over the next 12 months. However, the ratings could be upgraded if the company demonstrates improved operating performance that leads to an expectation of positive free cash flow generation and a reduction in debt-to-EBITDA below 5x (excluding consideration for equity income from joint ventures). Progress on improving margins and free cash flow, along with solid liquidity could lead to a stable rating outlook. Adient plc, the publicly-traded parent of Adient Global Holdings Ltd., is one of the world's largest automotive seating suppliers with a leading market position in the Americas, Europe and China, and has longstanding relationships with the largest global original equipment manufacturers (OEMs) in the automotive space. Adient's automotive seating solutions include complete seating systems, frames, mechanisms, foam, head restraints, armrests, trim covers and fabrics. Adient also participates in the automotive seating and interiors market through its joint ventures in China. Revenues for the LTM period ending December 31, 2019 were $16.3 billion. AIRNET TECHNOLOGY: Has Until Dec. 10 to Regain Nasdaq Compliance ---------------------------------------------------------------- AirNet Technology Inc. has received a notification letter from the Listing Qualifications Department of The Nasdaq Stock Market Inc. dated April 17, 2020 stating a Nasdaq's determination to toll the compliance periods for bid price and market value of publicly held shares requirements through June 30, 2020. The Notice further stated that on April 16, 2020, Nasdaq filed an immediately effective rule change with the Securities and Exchange Commission to toll the compliance periods for the Price-based Requirements . Accordingly, since the Company had 163 calendar days remaining in its bid price compliance period as of April 16, 2020, the Company will, upon reinstatement of the Price-based Requirements, still have 163 days from July 1, 2020, or until Dec. 10, 2020, to regain compliance. The Company can regain compliance, either during the suspension or during the compliance period resuming after the suspension, by evidencing compliance with the Price-based Requirements for a minimum of 10 consecutive trading days. About AirNet Technology Incorporated in 2007 and headquartered in Beijing, China, AirNet Technology Inc., formerly known as AirMedia Group Inc., provides in-flight solutions to connectivity, entertainment and digital multimedia in China. AirNet -- http://ir.ihangmei.com-- empowers Chinese airlines with Internet connections through a network of satellites and land-based beacons, provides airline travelers with interactive entertainment and a coverage of breaking news, and furnishes corporate clients with advertisements tailored to the perceptions of the travelers. Marcum Bernstein & Pinchuk LLP, in New York, issued a "going concern" qualification in its report dated April 30, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing that the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. AirMedia incurred a net loss of US$93.41 million in 2018 following a net loss of US$179.2 million in 2017. As of Dec. 31, 2018, AirMedia had US$129.8 million in total assets, $115.4 million in total liabilities, and US$14.39 million in total equity. AL AMJADY: $750K Sale of Elizabeth Property Denied as Moot ---------------------------------------------------------- Judge Stacey L. Meisel of the U.S. Bankruptcy Court for the District of New Jersey denied as moot Al Amjady's private sale of the real estate situated at 801-805 Rahway Avenue, Elizabeth, County of Union, New Jersey, together with all of the buildings, appurtenant structures, improvements and fixtures presently located on or appurtenant located thereon, to 801-805 Tahway, LLC for $750,000, free and clear of all liens, pursuant to their Contract of Sale. The successful party will serve the Order on the Debtor, any trustee and all parties who entered an appearance on the matter. A hearing on the Motion was held on March 31, 2020. Al Amjady sougth Chapter 11 protection (Bankr. D.N.J. Case No. 19-25650) on Aug. 13, 2019. The Debtor tapped Andrew I. Radmin, Esq., at Carkhuff & Radmin P.C., as counsel. ALASDAIR ANDREW FRASER: $2.9M Sale of Scotssdale Property Approved ------------------------------------------------------------------ Judge Brenda K. Martin of the U.S. Bankruptcy Court for the District of Arizona authorized Alasdair Andrew Fraser's sale of his interest in real property described as 27473 N. 97 Place, Scottsdale, Arizona to Carl H. and Denise T. Forsman for $2,875,000 cash. Disbursing Agent ROI Properties and the Debtor are authorized and empowered to execute all documents and take such actions as are reasonably necessary and appropriate to consummate the sale of the Real Property to the Buyers. From the proceeds of the sale, the escrow agent will pay (1) brokerage commissions of not more than 4% of the sales price; (2) the lien of Estancia Community Association in the amount of $9,318; (3) fees and costs (including reasonable attorney's fees) in an amount not to exceed $10,224 incurred by the Disbursing Agent; (4) normal and customary seller closing costs, prorations and fees customarily paid by a seller of residential real property; (5) $1 million to Estancia; and (6) all remaining proceeds of the sale will be disbursed by the escrow agent to the Disbursing Agent. On April 29, 2020, the Debtor will provide Estancia with its expert report setting forth the cost of repair of the items identified in the Court's Feb. 12, 2020 "Partial Ruling on Claim Objection." The Disbursing Agent will disburse to Estancia all sales proceeds in excess of the amounts set forth in that expert report. If Estancia believes that the report is inconsistent with the Court's prior rulings including this Order and at the hearing on the Sale Motion, and the Debtor and Estancia are unable to agree on an additional amount to be paid to Estancia, the Court will decide that issue. All other funds received through the sale of the Real Property will be held by the Disbursing Agent in an interest bearing account pending further order of the Court. The Liens will attach to the net sale proceeds (after payment of the sums set forth) in priority afforded each lien under Arizona law. The Order will be immediately effective when entered upon the docket and the effectiveness hereof will not be stayed or delayed by any rule of the Court. A hearing on the Motion was held on March 31, 2020 at 2:00 p.m. Alasdair Andrew Fraser sought Chapter 11 protection (Bankr. D. Ariz. Case No. 18-14512) on Nov. 29, 2018. The Debtor tapped Edwin B. Stanley, Esq., at Simbro & Stanley, PLC, as counsel. ALLIANT HOLDINGS: Moody's Rates $300MM Sr. Unsec. Notes 'Caa2' -------------------------------------------------------------- Moody's Investors Service has assigned a Caa2 rating to $300 million of seven-year senior unsecured notes being issued by Alliant Holdings Intermediate, LLC (corporate family rating B3), a subsidiary of Alliant Holdings, L.P. (together with its subsidiaries, Alliant). Alliant will use net proceeds from the offering to pay down its existing $50 million revolver balance and add liquidity to its balance sheet. The rating outlook for Alliant is unchanged at stable. RATINGS RATIONALE For insurance brokers, including Alliant, the coronavirus and related economic shock will negatively impact revenues, earnings and cash flows depending on the duration and severity of the downturn. Insurance premium volumes will be hurt by declining insured exposures, a more challenging rate environment, and return premium provisions in various commercial lines, all of which will put downward pressure on brokers' commissions and fees. However, brokers will benefit from the mandatory nature of many insurance products (to meet insured parties' regulatory and financing requirements) and by the brokers' largely variable cost structure. Alliant maintains a $200 million revolver, and this debt issuance adds cash to its balance sheet to provide additional liquidity to operate in the current environment. Moody's expects that Alliant will limit discretionary spending, including acquisitions, in the months ahead to protect its credit profile. Alliant's ratings reflect its leading position in several niche markets, historically steady organic revenue growth and strong operating margins, said Moody's. Alliant's emphasis on specialty programs, where the broker offers distinct value to both insurance buyers and insurance carriers, has been a successful strategy. Alliant has built its specialty and middle market insurance business by expanding through a mix of organic growth, lateral hires (seasoned producers, mostly with specialty books of business) and acquisitions. The company has reported strong historical revenue growth, healthy EBITDA margins, and good free-cash-flow-to-debt metrics. These strengths are offset by aggressive financial leverage and moderate interest coverage, along with its contingent/legal risk related to lateral hires and acquisition integration risk. The company also faces potential liabilities from errors and omissions, a risk inherent in professional services. Giving effect to the transaction, Alliant will have pro forma debt-to EBITDA of 7.5x-8.0x, (EBITDA - capex) interest coverage of just under 2.0x, and free-cash-flow-to-debt in the low to mid-single digits, according to Moody's estimates. These pro forma metrics reflect Moody's accounting adjustments for operating leases, contingent earnout obligations, certain non-recurring and unusual items, and run-rate EBITDA from acquisitions. The rating agency views Alliant's leverage as high for its rating category. Factors that could lead to an upgrade of Alliant's ratings include: (i) debt-to-EBITDA ratio below 6.5x, (ii) (EBITDA - capex) coverage of interest exceeding 2x, and (iii) free-cash-flow-to-debt ratio exceeding 5%. Factors that could lead to a rating downgrade include: (i) debt-to-EBITDA ratio above 8x, (ii) (EBITDA - capex) coverage of interest below 1.2x, or (iii) free-cash-flow-to-debt ratio below 2%. Moody's has assigned the following rating (and loss given default (LGD) assessment): $300 million seven-year senior unsecured notes at Caa2 (LGD5). The company expects the add-on to be fungible with its existing senior unsecured notes. The following Alliant ratings remain unchanged: Corporate family rating at B3; Probability of default rating at B3-PD; $200 million senior secured revolving credit facility maturing in May 2023 at B2 (LGD3); $2.6 billion senior secured term loans maturing in May 2025 at B2 (LGD3); $690 million senior unsecured notes maturing in October 2027 at Caa2 (to LGD5 from LGD6). Alliant Holdings Co-Issuer, Inc. is a co-issuer of the existing and new senior unsecured notes. The rating outlook for Alliant is unchanged at stable. The principal methodology used in these ratings was Insurance Brokers and Service Companies published in June 2018. Alliant, based in Newport Beach, California, is a specialty-oriented insurance broker providing property & casualty and employee benefits products and services to middle-market clients across the US. The company generated revenue of nearly $1.6 billion for 2019. AMC ENTERTAINMENT: S&P Rates New $500MM Senior Secured Notes CCC+ ----------------------------------------------------------------- S&P Global Ratings assigned its 'CCC+' issue-level rating and '1' recovery rating to Leawood, Kan.-based movie theater chain AMC Entertainment Holdings Inc.'s proposed $500 million senior secured notes due 2025. The '1' recovery rating indicates S&P's expectation for very high recovery (90%-100%; rounded estimate: 95%) for lenders in the event of a payment default. The company plans to use the proceeds from this offering to provide additional liquidity while its theaters remain closed. As of March 31, 2020, AMC had a cash balance of about $300 million, including the proceeds from full draws on both of its revolvers. Management estimates that this cash would be sufficient to fund its operations through June with a partial reopening in July. The company expects the proposed financing would provide it with enough liquidity to last until November, if theaters remain closed, with a partial reopening necessary by Thanksgiving. Additionally, the issuance is contingent on the company securing a waiver for the springing covenants on both of its revolvers. If AMC successfully executes this transaction, it will reduce the risk of a payment default or covenant violation over the next six months. "This transaction will also provide the company with enough liquidity to operate beyond mid-summer, which is when we currently expect theaters to reopen. However, it does not provide AMC with much of a cushion if its theaters remain closed for a longer period or if consumers are less inclined to return to theaters than we expect. We also anticipate the coupon rate for this debt to be high such that this transaction will further hinder AMC's ability to generate cash flow and improve its leverage once its theaters reopen. Even if the company executes the transaction, we still believe it could consider undertaking a subpar debt exchange or redemption, which we would view as a selective default, given its current debt trading levels and our expectation for minimal organic deleveraging over the next several years," S&P said. AMCP CLEAN: Bank Debt Trades at 59% Discount -------------------------------------------- Participations in a syndicated loan under which AMCP Clean Acquisition Co LLC is a borrower were trading in the secondary market around 41 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD250 million term loan is scheduled to mature on July 10, 2025. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. AMERICAN TELECONFERENCING: Bank Debt Trades at 43% Discount ----------------------------------------------------------- Participations in a syndicated loan under which American Teleconferencing Services Ltd is a borrower were trading in the secondary market around 58 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The US$50 million term loan is scheduled to mature on June 6, 2022. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. AMMON DAVID WEBER: Proposed Sale of Borger Property Approved ------------------------------------------------------------ Judge Robert L. Jones of the U.S. Bankruptcy Court for the Northern District of Texas authorized Ammon David Weber's sale of his homestead located at 305 Bois D-Arc, Borger, Texas. The proceeds of the sale be used to pay off the secured claim of Fannie Mae, and all existing property taxes, with any remaining dividend to the Debtor be paid into a dedicated bank account, pending approval of the Debtor's Chapter 11 plan. Counsel for Debtor: Van W. Northern, Esq. NORTHERN LEGAL, PC 2700 S. Western St., Suite 200 Amarillo, TX 79109 Telephone: (806) 374-2266 Facsimile: (806) 374-9535 The case is In re Ammon David Weber (Bankr. N.D. Tex. Case No. 19-20003-rlj-11). AMYNTA AGENCY: Bank Debt Trades at 17% Discount ----------------------------------------------- Participations in a syndicated loan under which Amynta Agency Borrower Inc is a borrower were trading in the secondary market around 83 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD726 million term loan is scheduled to mature on February 28, 2025. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. ANASTASIA PARENT: Bank Debt Trades at 58% Discount -------------------------------------------------- Participations in a syndicated loan under which Anastasia Parent LLC is a borrower were trading in the secondary market around 42 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD650 million term loan is scheduled to mature on August 10, 2025. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. ANCHOR GLASS: Bank Debt Trades at 58% Discount ---------------------------------------------- Participations in a syndicated loan under which Anchor Glass Container Corp is a borrower were trading in the secondary market around 42 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD150 million term loan is scheduled to mature on December 7, 2024. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. AP GAMING I: Moody's Rates $80MM Incremental Term Loan 'B3' ----------------------------------------------------------- Moody's Investors Service assigned a B3 rating to AP Gaming I, LLC's proposed $80 million incremental senior secured term loan. The company's B3 Corporate Family Rating, Caa1-PD Probability of Default Rating, and B3 rated senior secured revolver and term loan are unchanged. The company's Speculative Grade Liquidity rating is unchanged at SGL-3. The outlook remains negative. Proceeds from the proposed $80 million incremental senior secured term loan facility, net of fees and expenses, will be used to provide incremental cash liquidity for the company. The additional liquidity is beneficial to improve flexibility to manage in the current weak economy including temporary customer facility closures, but the incremental debt is a credit negative increase in leverage to help cover the company's current cash burn. Assignments: Issuer: AP Gaming I, LLC Senior Secured Bank Credit Facility, Assigned B3 (LGD3) RATINGS RATIONALE AP Gaming's B3 CFR reflects the meaningful revenue and earnings decline over the next few months expected from efforts to contain the coronavirus and the potential for a slow recovery once conditions improve. The rating is additionally constrained by the company's small size and scale in terms of revenue and EBITDA, both as an absolute number and as compared to its peers. Revenues are largely tied to the volume of gaming machine play. The company can reduce spending on game development and capital expenditures when revenue weakens, but the need to retain a skilled workforce to maintain competitive technology contributes to high operating leverage. The company benefits from its significant EBITDA margins and recurring revenue profile during normal operating periods, along with its growing installed base. The company's elevated geographic and customer concentration remain a key constraint, although concentration levels improved in recent years as a result of organic growth as well as several acquisitions. The company's speculative-grade liquidity rating of SGL-3 considers the expected decline in earnings and cash flow and diminished covenant cushion. In tandem with the proposed new $80 million term loan, the company is also seeking covenant relief on its existing credit facilities. As of the year ended December 31, 2019, AP Gaming had cash of approximately $13 million, and a $30 million undrawn revolving credit facility. The company fully drew down on its revolver in March 2020. Pro-forma for the revolver and the proposed $75 million term loan, the company would have cash of about $112 million. Moody's estimates the company could maintain sufficient internal cash sources after maintenance capital expenditures to meet required annual amortization and interest requirements assuming a sizeable decline in annual EBITDA. The expected EBITDA decline will not be ratable over the next year and because EBITDA and free cash flow will be negative for an uncertain time period, liquidity and leverage could deteriorate quickly over the next few months. The company has $6 million of debt maturing in 2020, with no material maturities until its revolver expires in 2022. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The gaming sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in AP Gaming's credit profile, including its exposure to travel disruptions and discretionary consumer spending have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and AP Gaming remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The negative outlook considers that AP Gaming remains vulnerable to travel disruptions and unfavorable sudden shifts in discretionary consumer spending and the uncertainty regarding the timing of its customers' facilities reopening and the pace at which consumer spending at these properties will recover. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be downgraded if liquidity deteriorates or if Moody's anticipates AP Gaming's earnings declines to be deeper or more prolonged because of actions to contain the spread of the virus or reductions in discretionary consumer spending. A ratings upgrade is unlikely given the weak operating environment. However, the ratings could be upgraded if customers facilities reopen and earnings recover such that positive free cash flow and reinvestment flexibility is restored and debt-to-EBITDA is sustained below 5.5x. AP Gaming, a subsidiary of PlayAGS, Inc., is a designer and supplier of casino gaming products. The company's products are primarily leased to the Class II Native American market and sold into the Class III commercial and Native American gaming marketplace. The company's products include electronic gaming machines, tables games, as well as interactive social games available on mobile devices. Revenue reported for the last twelve-month period ended December 31, 2019 was approximately $305 million. APC AUTOMOTIVE: Bank Debt Trades at 70% Discount ------------------------------------------------ Participations in a syndicated loan under which APC Automotive Technologies LLC is a borrower were trading in the secondary market around 30 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD143 million term loan is scheduled to mature on May 10, 2024. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. ARAMARK SERVICES: Moody's Cuts CFR to Ba3, Outlook Stable --------------------------------------------------------- Moody's Investors Service downgraded Aramark Services, Inc.'s corporate family rating to Ba3 from Ba2, probability of default rating to Ba3-PD from Ba2-PD, senior secured to Ba2 from Ba1 and senior unsecured to B1 from Ba3. The Speculative Grade Liquidity rating is maintained at SGL-1. The outlook was revised to stable from negative. RATINGS RATIONALE "The disruption to Aramark's businesses from the COVID-19 pandemic will further stress the company's credit metrics, which were already weakly positioned in its rating category, driving the ratings downgrade," said Edmond DeForest, Moody's Vice President and Senior Credit Officer. The Ba3 CFR reflects Moody's expectations for revenue, profit and free cash flow to decline substantially in fiscal 2020 (ends September). Financial leverage is expected to remain above 5 times for the next 12 to 18 months. Moody's anticipates Aramark will maintain market share and be well positioned to rebound once its customers resume their normal operations. Although Aramark's businesses may rebound once the impacts of the COVID-19 pandemic wane, Moody's does not expect Aramark to return its credit profile to levels commensurate with a Ba2 CFR in the next 12 to 18 months. Many of Aramark's business, entertainment and education customers have greatly reduced their demand for food and related and uniform services, whereas customers in healthcare and those seeking services including sanitization should prove resilient, and could even grow. A highly variable cost structure and low maintenance capital investment requirements should help profits and cash flow decline at a far less negative rate than revenues. Moody's also anticipates Aramark could generate cash from working capital if its revenues decline. Moody's considers Aramark's business generally stable and predictable, with long term contracts and fixed asset investments providing high revenue visibility and meaningful competitive barriers. All financial metrics cited reflect Moody's standard adjustments. The rapid spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The food and related and uniform services sectors have been significantly and adversely impacted by the shock. More specifically, the weaknesses in Aramark's credit profile, including its high financial leverage, have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions. Aramark remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Aramark of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Aramark's food service and uniform and related services face a diverse set of food safety and waste water handling rules and regulations. Aramark has a track record of complying with applicable laws. Aramark maintains job-appropriate training of its large employee base and board oversight of its risk management practices. As a public company, Aramark provides transparency into its governance and financial results and goals. The board of directors is controlled by independent directors. In late 2019, there were 5 director and several executive officer changes, including of the Chairman, CEO and CFO. The acquisitions of uniform services provider Ameripride Services, Inc. for $1.0 billion in January 2018 and group purchasing organization Avendra Ltd. for $1.35 billion in December 2017 were funded entirely with debt. Its Healthcare Technologies business was sold for $293 million in 2018. Among Aramark's stated near term capital allocation priorities are net financial leverage reduction and high cash returns to shareholders. Moody's considers Aramark's financial strategies evolving. The Ba2 rating on the senior secured credit facilities reflects their priority position in the debt capital structure and a Loss Given Default assessment of LGD3. The notes are secured by a first lien pledge of substantially all of the company's domestic assets (excluding accounts receivable pledged for the securitization facility) and 65% of the stock of direct foreign subsidiaries. The Ba2 rating, one notch above the Ba3 CFR, benefits from loss absorption provided by the junior ranking debt and non-debt obligations. The B1 rating on the senior unsecured notes reflects a loss given default assessment of LGD5. The senior notes are guaranteed by substantially all of the domestic subsidiaries of the company (excluding the securitization subsidiaries). The loss given default assessment reflects effective subordination to all the secured debt and certain trade claims at default. The B1 rating is one notch higher than the outcome utilizing Moody's Loss Given Default methodology, reflecting Moody's expectations for a decrease in the proportion of secured to total debt once the currently fully drawn $1 billion revolver and $450 million asset securitization facilities are repaid. The SGL-1 speculative grade liquidity rating reflects Aramark's very good liquidity profile, driven by over $1 billion of balance sheet cash. However, Moody's expects limited free cash flow in fiscal 2020 and no availability under the $1 billion revolving credit facility maturing in 2023 and $450 million accounts receivable securitization facility maturing in 2021, which are fully drawn. The revolving credit facilities have a net senior secured debt to EBITDA covenant, but ample covenant headroom over the next four quarters is anticipated despite elevated total debt. The stable outlook reflects Moody's anticipation of diminished revenue and elevated financial leverage, but very good liquidity. The stable outlook also anticipates Aramark could reduce costs and limit capital investments if the adverse impacts for COVID-19 persist into 2021. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Moody's expects Aramark will maintain: 1) at least 1% to 2% revenue growth; 2) EBITA margins around 6%; 3) free cash flow of at least $400 million; and 4) debt to EBITDA around 4 times. The ratings could be downgraded if: 1) revenue remains pressured due to an expansion of adverse impacts from COVID-19, a loss of customers or declines in market share; 2) liquidity weakens; or 3) debt to EBITDA will be maintained around 6 times or higher. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Issuer: Aramark Services, Inc. Corporate Family Rating, Downgraded to Ba3 from Ba2 Probability of Default Rating, Downgraded to Ba3-PD from Ba2-PD Senior Secured Term Loan, Downgraded to Ba2 (LGD3) from Ba1 (LGD3) Senior Secured Revolving Credit Facility, Downgraded to Ba2 (LGD3) from Ba1 (LGD3) Gtd Senior Unsecured Regular Bond/Debenture, Downgraded to B1 (LGD5) from Ba3 (LGD5) Outlook, Changed To Stable From Negative Issuer: ARAMARK Canada Ltd. Senior Secured Term Loan, Downgraded to Ba2 (LGD3) from Ba1 (LGD3) Outlook, Changed To Stable From Negative Issuer: Aramark International Finance Sarl Gtd Senior Unsecured Regular Bond/Debenture, Downgraded to B1 (LGD5) from Ba3 (LGD5) Outlook, Changed To Stable From Negative Issuer: Aramark Investments Limited Senior Secured Term Loan, Downgraded to Ba2 (LGD3) from Ba1 (LGD3) Outlook, Changed To Stable From Negative Aramark, based in Philadelphia, PA, is a provider of food and related services to a broad range of institutions and the second largest provider of uniform and career apparel in the United States. Moody's expects fiscal 2020 (ends September) revenue of around $13 billion. ARRAY CANADA: Bank Debt Trades at 48% Discount ---------------------------------------------- Participations in a syndicated loan under which Array Canada Inc is a borrower were trading in the secondary market around 52 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The US$315 million term loan is scheduled to mature on February 9, 2023. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is Canada. ARROW BIDCO: Moody's Cuts CFR to B3 & Sr. Sec. Rating to Caa1 ------------------------------------------------------------- Moody's Investors Service downgraded its ratings for Arrow Bidco LLC (dba Target Hospitality Corp. (Target)), including the company's corporate family rating (CFR to B3 from B1) and probability of default rating (to B3-PD from B1-PD), along with its senior secured notes rating (to Caa1 from B2). The speculative grade liquidity (SGL) rating was downgraded to SGL-4 from SGL-2. The ratings outlook is negative. "The downgrades reflect its expectation that Target's earnings and cash flow will be significantly pressured over the course of 2020," says Shirley Singh, Moody's lead analyst for the company. Target's outsized exposure to the pressured oil & gas sector makes it susceptible to the recent sharp fall in oil prices and the subsequent contraction in oil field activity stemming from the COVID-19 crisis and broader macroeconomic weakness. "While the company's "take-or-pay" contractual provisions with its customers will provide some level of baseline earnings support, Moody's anticipates sharp declines in bed utilization and daily rates which will weaken key credit metrics, cash flows and ensuing liquidity over the course of 2020 and into 2021," added Singh. The rapid and widening spread of the coronavirus outbreak, the deteriorating global economic outlook, falling oil prices and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The global oil & gas sector is among the sectors that have been adversely affected by the shock. More specifically, Target's exposure to the oil & gas sector has left it vulnerable to shifts in market sentiment in these unprecedented operating conditions, and the company remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its actions reflect the impact on Target of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The following rating actions were taken: Downgrades: Issuer: Arrow BidCo LLC Corporate Family Rating, Downgraded to B3 from B1 Probability of Default Rating, Downgraded to B3-PD from B1-PD Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-2 Senior Secured Regular Bond/Debenture, Downgraded to Caa1 (LGD4) from B2 (LGD4) Outlook Actions: Issuer: Arrow BidCo LLC Outlook, Changed To Negative From Stable RATINGS RATIONALE Target's B3 CFR broadly reflects the company's relatively modest scale within its niche market scope, high customer concentration and lack of operating history as a consolidated entity. Moody's calculation of leverage at December 2019 was a relatively 2.8x, although this is expected to meaningfully increase as activity and spending levels in the pressured oil & gas sector continue to contract over the course of 2020. Even so, Target's "take-or-pay" contract provisions coupled with a more conservative growth approach relative to 2019's significant investment in lodge sites and acquisitions should support free cash flow at breakeven to modestly positive levels in 2020. Target's governance risk is moderate as TDR Capital LLC accounts for 63% ownership and could exercise meaningful control over the company's decisions. The negative outlook reflects the risk that declining demand in Target's end markets could accelerate and lead to a more pronounced downturn that results in higher leverage and weaker liquidity provisions for the company, including increased ABL reliance and negative free cash flow. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the outlook for the oil & gas sector improves, adjusted debt-to EBITDA is sustained below 5.0x, free cash flow-to-debt is sustained above 5%. An upgrade would also require an expectation that the company would maintain good liquidity provisions with a prudent capital structure and financial policies that support the aforementioned leverage level. The ratings could be downgraded if debt-to-EBITDA is sustained above 6 times; occupancy, average daily rates or customers continues to decline; or free cash flow remains negative increasing the reliance on ABL facility. Headquartered in The Woodland, Texas and controlled by affiliates of TDR, Arrow Bidco LLC (dba Target Hospitality Corp.) provides turnkey specialty rental workforce lodging and hospitality solutions in North America. Sales in 2019 were $321 million. ARUBA INVESTMENTS: Bank Debt Trades at 17% Discount --------------------------------------------------- Participations in a syndicated loan under which Aruba Investments Inc is a borrower were trading in the secondary market around 83 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The EUR246 million term loan is scheduled to mature on February 2, 2022. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. ATLANTIC AVIATION: Moody's Cuts CFR & Sr. Secured Rating to B2 -------------------------------------------------------------- Moody's Investors Service downgraded its ratings for Atlantic Aviation FBO, Inc., including the company's corporate family rating (CFR, to B2 from Ba3) and probability of default rating (to B2-PD from Ba3-PD), and the ratings for its senior secured credit facility (to B2 from Ba3). All ratings have been placed on review for downgrade. RATINGS RATIONALE The downgrades incorporate Moody's expectation of a difficult operating environment for Atlantic Aviation involving a significant decline in general aviation traffic volumes that will lead to earnings pressures and a weaker financial profile. The downgrades consider Atlantic's weaker liquidity and reduced financial flexibility due to the company's plan to cancel its revolving credit facility, as well as Moody's expectation of a meaningful reduction in cash generation for at least the balance of 2020, and uncertainty as to the degree of financial support that may be necessary and would be provided by Atlantic's parent, Macquarie Infrastructure Corporation. The B2 CFR balances Atlantic's position as the second largest fixed-base operator within the US and the resultant scale advantages against comparatively high financial leverage and heavy exposure to cyclical business jet and general aviation markets. Atlantic's historically strong profitability speaks to its good competitive standing within the highly fragmented FBO industry while meaningful barriers to entry add further credit support. These considerations are tempered by the cyclical nature of general aviation markets and Moody's expectation that lower general aviation traffic will lead to meaningful top-line and earnings headwinds and an across the board weakening of Atlantic's key credit metrics. The rapid and widening spread of the coronavirus outbreak, the deteriorating global economic outlook, falling oil prices and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The fixed-base operator sector has been adversely affected by the shock given its exposure to the severely impacted general aviation industry and, more broadly, consumer demand and market sentiment. More specifically, Atlantic's weakening financial flexibility and exposure to general aviation leave it vulnerable to shifts in market sentiment in these unprecedented operating conditions, and the company remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its actions reflect the impact on Atlantic of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. All ratings are on review for downgrade. The review will focus on (1) expectations for general aviation traffic volumes for the balance of 2020 and into 2021; (2) Atlantic's ability to reduce its cost structure and the likely level of cash generation and/or consumption over the next few quarters; and (3) the level of financial support and liquidity that may be needed and would be provided by Atlantic's parent, Macquarie Infrastructure Corporation (MIC). FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to a ratings upgrade include expectations of an improved liquidity profile, involving the establishment of a revolving credit facility at Atlantic Aviation, or sustainably higher cash balances, or expectations of free cash flow-to-debt consistently in at least the mid-single-digit range. Expectations of growth in general aviation traffic such that volumes are expected to approach 2019 levels coupled with debt-to-EBITDA sustained below 4x could also prompt consideration for prospective upward ratings momentum. Factors that could lead to a ratings downgrade include declines in general aviation volumes beyond those currently contemplated, or if debt-to-EBITDA exceeds 6.5x for any meaningful period. A downgrade could also occur with weakening liquidity such that free cash flow was expected to be materially negative, or if Atlantic's cash balances were to decline significantly, or if the company fails to implement a new backstop revolving credit facility beyond 2020. A weakening of MIC's overall credit profile could also cause downward ratings pressure. The following is a summary of the rating actions: Issuer: Atlantic Aviation FBO, Inc.: Corporate Family Rating, downgraded to B2 from Ba3, on review for further downgrade Probability of Default Rating, downgraded to B2-PD from Ba3-PD, on review for further downgrade Gtd Senior Secured credit facility, downgraded to B2 (LGD3) from Ba3 (LGD3), on review for further downgrade Outlook, changed to Rating Under Review from Stable Atlantic Aviation FBO, Inc., headquartered in Plano, Texas, has fixed base operator locations at 70 general aviation airports in the US. The company's FBOs provide fueling and fuel related services, aircraft parking and hangar services to owners/operators of jet aircraft, primarily in the general aviation sector of the air transportation industry, but also to commercial, military, freight and government aviation customers. Through an intermediate holding company, Atlantic is owned by Macquarie Infrastructure Corporation. Gross revenues for the twelve months ended December 2019 were approximately $962 million. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. AWAZE LTD: Bank Debt Trades at 48% Discount ------------------------------------------- Participations in a syndicated loan under which Awaze Ltd is a borrower were trading in the secondary market around 52 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The EUR167 million term loan is scheduled to mature on May 9, 2026. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. BCP RAPTOR II: Bank Debt Trades at 51% Discount ----------------------------------------------- Participations in a syndicated loan under which BCP Raptor II LLC is a borrower were trading in the secondary market around 49 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The US$690 million term loan is scheduled to mature on November 3, 2025. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. BI-LO LLC: Moody's Hikes CFR to B2 & Sr. Secured Rating to B3 ------------------------------------------------------------- Moody's Investors Service upgraded BI-LO, LLC's Corporate Family Rating to B2 from B3 and its Probability of Default rating to B2-PD from B3-PD. Moody's also upgraded the ratings of the company's ABL revolving credit facility to Ba3 from B1, its FILO term loan rating to B2 from B3 and its senior secured term loan rating to B3 from Caa1. The rating outlook remains stable. "BI-LO has improved operating performance in the last year with positive same store sales growth despite a price competitive environment and Moody's expects credit metrics to continue to improve in the next 12-18 months", Moody's Vice President Chadha stated. "We also expect sales volume and profitability to get an uplift this quarter due to pantry loading during the coronavirus related disruption", Chadha further stated. Upgrades: Issuer: BI-LO, LLC Probability of Default Rating, Upgraded to B2-PD from B3-PD Corporate Family Rating (Local Currency), Upgraded to B2 from B3 Senior Secured FILO Term Loan, Upgraded to B2 (LGD3) from B3 (LGD3) Senior Secured Term Loan, Upgraded to B3 (LGD4) from Caa1 (LGD4) Senior Secured ABL Revolving Credit Facility, Upgraded to Ba3 (LGD2) from B1 (LGD2) Outlook Actions: Issuer: BI-LO, LLC Outlook, Remains Stable RATINGS RATIONALE The B2 Corporate Family Rating reflects the highly competitive and challenging operating environment for supermarkets particularly in the geographies in which the company operates. Debt/EBITDA is expected to be modest at below 4.0 times in the next 12 months, but interest coverage will be relatively weak with EBIT/interest at about 1.5 times and free cash flow will be modest. Positive factors include company's large scale and geographic footprint, its good liquidity and relatively low debt burden. The company's bankruptcy filing in 2017 gave it an opportunity to reject leases and close underperforming stores to focus on a more cohesive and profitable footprint in the southeast particularly in Florida and South Carolina. The company has since closed 158 stores. Governance is a key rating factor as Moody's expects financial strategy to remain conservative going forward as the company is no longer majority owned by private equity sponsor Lone Star. The rating outlook is stable and reflects Moody's expectation that operating margins and profitability will continue to improve and liquidity will remain adequate. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The retail sector is one of the sectors that may be significantly affected by the shock given its sensitivity to consumer spending and market sentiment. More specifically, any weaknesses in BI-LO's credit profile, including its liquidity position could leave it vulnerable to shifts in market sentiment in these unprecedented operating conditions and BI-LO remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if the company's liquidity remains good, same store sales increase and operating profit improves such that EBIT/interest is sustained above 2.25 times and maintain Debt/EBITDA at or below 4.0 times with financial policies remaining benign. Ratings could be downgraded if liquidity deteriorates, same store sales decline for extended period and operating margin shrinks meaningfully or financial policies become aggressive. Ratings could also be downgraded if EBIT/interest is sustained below 1.5 times or debt to EBITDA is sustained above 5.0 times. The principal methodology used in these ratings was Retail Industry published in May 2018. BI-LO LLC, operates as a food retailer in the Southeastern United States. The Company operates supermarkets in Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina, and South Carolina under the "Winn-Dixie", "BI-LO", "Harveys" and "Fresco y Más" supermarket banners. The company is owned by private equity firm Lone Star. Revenue totaled $8.3 billion for the fiscal year 2019. BIZ AS USUAL: Seeks Court Approval to Employ Accountant ------------------------------------------------------- Biz as Usual, LLC, seeks approval from the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to hire an accountant. The Debtor proposes to employ Erica Booth, a business and tax accountant, to prepare its monthly operating reports and provide other accounting services, including the preparation of financial reports, tax documents and other papers which may be filed in its Chapter 11 case. The proposed compensation arrangement is a billable rate of $200 for the preparation of each monthly operating report and $150 an hour for accounting services. The accountant was paid $75 prior to Debtor's bankruptcy filing. Ms. Booth is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. About Biz as Usual Biz as Usual, LLC's primary business and primary source of income involves leasing its residential properties and commercial spaces. The Debtor has previously filed for Chapter 11 bankruptcy protection (Bankr. E.D. Pa. Case No. 15-15040) on July 15, 2015. Biz as Usual filed for Chapter 11 bankruptcy protection (Bankr. E.D. Pa. Case No. 19-16476) on Oct. 15, 2019, listing under $1 million in both assets and liabilities. Judge Eric L Frank oversees the case. Michael P. Kutzer, Esq., is the Debtor's bankruptcy counsel. BMC ACQUISITION: Bank Debt Trades at 18% Discount ------------------------------------------------- Participations in a syndicated loan under which BMC Acquisition Inc is a borrower were trading in the secondary market around 82 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD230 million term loan is scheduled to mature on December 28, 2024. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. BRAVE PARENT: Bank Debt Trades at 17% Discount ---------------------------------------------- Participations in a syndicated loan under which Brave Parent Holdings Inc is a borrower were trading in the secondary market around 83 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The US$242 million term loan is scheduled to mature on April 19, 2026. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. BRIXMOR PROPERTY: Moody's Affirms (P)Ba2 on Preferred Shelf Stock ----------------------------------------------------------------- Moody's Investors Service has affirmed Brixmor Property Group Inc.'s ratings, including the Baa3 issuer and unsecured debt ratings of its operating partnership, Brixmor Operating Partnership L.P. In the same rating action, Moody's also changed the rating outlook to stable from positive. The rating affirmation reflects Brixmor's solid credit profile, including its consistently strong operating performance and good liquidity with no debt maturities until 2022. The rating affirmation also incorporates Brixmor's focus on grocery anchored shopping centers, which enhance cash flow stability in the current coronavirus pandemic situation. The outlook has been revised to stable from positive due to the high likelihood that Brixmor will be unable to achieve the upgrade drivers on a sustained basis in the next twelve months. Brixmor's operating income pressure will persist while its tenants face disruption to their businesses. Moreover, the potential additional store closures and bankruptcies even after the public health crisis subsides could also weigh on the REIT's same-store NOI growth and leverage metrics, key drivers for an upgrade. Affirmations: Issuer: Brixmor Property Group Inc. Preferred Shelf, Affirmed (P)Ba1 Pref. shelf Non-cumulative, Affirmed (P)Ba1 Issuer: Brixmor Operating Partnership L.P. Senior Unsecured, Affirmed Baa3 LT Issuer Rating, Affirmed Baa3 Senior Unsecured Shelf, Affirmed (P)Baa3 Outlook Actions: Issuer: Brixmor Property Group Inc. Outlook, Changed To Stable From Positive Issuer: Brixmor Operating Partnership L.P. Outlook, Changed To Stable From Positive RATINGS RATIONALE The affirmation of the Baa3 long-term issuer and senior unsecured debt ratings reflects Brixmor's solid credit profile and operating performance, including fixed charge coverage of 4.0x for the TTM Q4 2019 and same-store NOI growth of 3.4% for the same period. In the third quarter 2019, Brixmor revised its 2019 SS NOI growth projection to 3.00% to 3.25% from 2.75% to 3.25%. The rating affirmation also incorporates Brixmor's good geographic and tenant diversification, as well as its focus on grocery and discount store anchored shopping centers, which enhance cash flow stability. The retail REIT format of neighborhood and community centers that focuses on convenience and necessity-based retailers have been less vulnerable to e-commerce penetration compared with mall and outlet centers. Brixmor's grocery anchored shopping centers account for approximately 70% of the portfolio, with average grocer sales of about $565 per square foot, well exceeding the national average of $300 range. Its largest MSA is New York-Newark-Jersey City, which represents just 7.8% of the REIT's annual base rent (ABR) and its largest tenant, TJMaxx, generates only 3.4% of ABR for Q4 2019. However, the rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The commercial retail real estate segment has been affected by the shock given the sensitivity to the retail environment and retailer health. Brixmor remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action in part reflects the impact on Brixmor, the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. It also incorporates the potential for fiscal stimulus actions by various governments, their agencies and financial regulators. Non-essential store closures that could extend for weeks rather than days would weaken the credit standings of many of Brixmor's tenants. A sharp deterioration in a tenant's credit profile could prompt landlords to offer rent relief or rent abatements. Decline in occupancy/lease pricing or prolonged litigation related to collectability of lease payments would affect retail landlords' earnings. Brixmor has a good financial policy, which reflects the REIT's executive level changes in 2016, who have executed enhanced financial controls, compliance and more transparent financial disclosures. The good financial policy also reflects its stable leverage ratios and strong liquidity profile with a laddered debt maturity schedule. Brixmor's secured leverage improved to less than 1% at Q4 2019 from over 11% at the end of 2016. Net debt to EBITDA was 6.32x on a TTM at Q4 2019. The REIT's sound liquidity position is supported by $550 million cash and over $600 million of remaining availability under its $1.25 billion revolving credit facility at March 30, 2020. Brixmor has no debt maturities until 2022 when $750 million of its unsecured debt matures. With an essentially fully unencumbered portfolio of nearly 99% of gross assets at Q4 2019, the REIT has an ample alternative funding source. Its risk management infrastructure is positively influencing its strategic decision-making with a focus on increasing leasing productivity and small shop occupancy, exiting single-asset markets while maintaining the REIT's breadth and scale as one of the largest open-air retail landlords in the US. Brixmor does not engage in ground-up development or mixed-use projects. Brixmor has transformed the historically under-invested and under-managed portfolio of assets with below-market rents to a more productive portfolio with in-place ABR per SF increasing to $14.74 at Q4 2019 from $12.85 at Q1 2016. Nonetheless, Brixmor has some exposure to failing and distressed retailers including Mattress Firm, Pier 1 and Ascena Retail (including Dressbarn). Changing demographic trends could continue to affect the retail sector. Moody's anticipates that Brixmor will sustain some cash flow declines in the next twelve to eighteen months as the REIT works to re-tenant the empty space. However, Moody's expects the long-term credit impact to be manageable as Brixmor has adequate liquidity to re-develop the locations to secure new tenants paying higher rents per square foot. The stable outlook reflects Moody's expectation that the spread of the coronavirus will put significant pressure on Brixmor's earnings in 2020, however its net debt/EBITDA will remain within the downgrade trigger of 7.0x and the REIT has good liquidity to get it through this period of unprecedented declines in occupancy. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS: Brixmor's ratings would be upgraded if the REIT maintains its net debt to EBITDA close to 6.0x, fixed charge coverage well above 3.5x and same-store NOI at 2.5% or higher on a consistent basis. Negative rating pressure would emerge if Brixmor's financial performance were to deteriorate such that its net debt to EBITDA is approaching 7.0x, fixed charge coverage falls below 3.0x on a sustained basis or if Brixmor reverses the current refinancing trend that has brought its secured debt to its lowest level of less than 1.0% of gross assets while nearly unencumbering all of its properties as of Q4 2019. A deterioration in Brixmor's funding and liquidity profile or material adverse developments in the retail sector would also lead to negative rating pressure. The principal methodology used in these ratings was REITs and Other Commercial Real Estate Firms published in September 2018. Brixmor Property Group Inc. (NYSE: BRX) is a self-managed retail real estate investment trust with 409 retail centers at December 31, 2019 aggregating 72 million square feet of GLA focused on owning and operating necessity-based neighborhood and community shopping centers. As of December 31, 2019, Brixmor had total gross book assets of $10.6 billion. BUILDERS FIRSTSOURCE: Moody's Alters Outlook on B1 CFR to Stable ---------------------------------------------------------------- Moody's Investors Service affirmed Builders FirstSource, Inc.'s B1 Corporate Family Rating and the B1-PD Probability of Default Rating. Moody's also affirmed the B1 rating on the company's secured debt and the B3 rating on its senior unsecured notes due 2030. The SGL-2 Speculative Grade Liquidity Rating is maintained. The outlook is changed to stable from positive. The change in outlook to stable from positive reflects Moody's expectation that BLDR's revenue and earnings will contract over the next twelve months. New residential construction, the primary driver of BLDR's revenue, is under pressure as the coronavirus and related economic concerns will weaken homebuyer sentiment. Moody's has a negative outlook for the US homebuilding sector. The B1 rating on the company's 6.75% senior secured notes due 2027 is not impacted by BLDR's recent announcement that it is increasing these notes by $250 million to $677.5 million. Moody's views the proposed transaction as a credit positive since proceeds from the add-on will be used to repay revolver borrowings, resulting in more liquidity. Higher cash interest payments will not materially impact interest coverage nor cash flow. However, the addition of permanent debt in BLDR's capital structure will increase leverage on a year-over-year basis. The following ratings/assessments are affected by its actions Affirmations: Issuer: Builders FirstSource, Inc. Corporate Family Rating, Affirmed B1 Probability of Default Rating, Affirmed B1-PD Senior Secured Bank Credit Facility, Affirmed B1 Senior Secured Regular Bond/Debenture, Affirmed B1 Senior Unsecured Regular Bond/Debenture, Affirmed B3 Outlook Actions: Issuer: Builders FirstSource, Inc. Outlook, Changed To Stable From Positive RATINGS RATIONALE BLDR's B1 CFR reflects Moody's expectation that the company will maintain its very good liquidity profile over the next twelve months. Also, Moody's projects good credit metrics, such as debt-to-LTM EBITDA of 4.1x at year-end 2020 (2.8x at year-end 2019) despite a scenario in which the company experiences significant revenue decline of 20% on a year-over-year basis and some contraction in operating margin to about 4.3%. The rapid and widening spread of the coronavirus outbreak and the resulting economic contraction are creating a severe and extensive credit shock across the homebuilding sector. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Governance risk Moody's considers in BLDR's credit profile is a moderate financial strategy, evidenced by reasonable leverage, no significant share repurchases and no dividends at this time. The company has ten directors on its board, all but one are independent. Three of the ten directors are affiliated with private equity and one board member retired from BLDR. This level of board experience, independence and oversight should help minimize governance risks. BLDR's SGL-2 Speculative Grade Liquidity Rating reflects Moody's view that the company will maintain a good liquidity profile over the next twelve to 18 months, generating free cash flow throughout the period and having abundant revolver availability. FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade (All ratios incorporate Moody's standard adjustments) - Debt-to-LTM EBITDA is sustained below 3.0x - Operating margin is maintained above 5.0% - Preservation of a good liquidity profile - Trends in end markets that can support organic growth Factors that could lead to a downgrade (All ratios incorporate Moody's standard adjustments) - Operating margin nearing 3% - Debt-to-LTM EBITDA sustained above 4.0x - The company's liquidity profile deteriorates Builders FirstSource, Inc., headquartered in Dallas, Texas, is a national distributor of lumber, trusses, millwork, and other building products, and a provider of construction services. Revenue for the year ended December 31, 2019 was about $7.3 billion. BVI MEDICAL: Moody's Alters Outlook on B3 CFR to Stable ------------------------------------------------------- Moody's Investors Service revised BVI Medical, Inc.'s outlook to stable from positive. The company's B3 Corporate Family Rating, B3-PD Probability of Default Rating, and B3 first lien credit facilities ratings were affirmed. The change of outlook reflects Moody's expectations that elective vision care procedures including cataract surgeries will decline materially over the near term, with the pace and timing of a recovery being highly uncertain. Moody's no longer expects BVI's debt/EBITDA to be sustained over the next 12 to 18 months below 6 times, Moody's threshold for a higher rating on BVI. The affirmation of the B3 CFR with a stable outlook reflects Moody's expectations that BVI will maintain an adequate liquidity profile with cash levels that appear sufficient to absorb negative cash flow while revenues remain temporarily pressured. The company maintains a solid market position in its ophthalmologic business across a broad range of instruments, intraocular lenses and other related equipment and consumable products used in cataract, glaucoma and other procedures, and Moody's expects BVI will maintain market share when procedure volumes recover. Rating Actions: The following ratings were affirmed: Rating Affirmations: Issuer: BVI Medical, Inc. Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD GTD Senior Secured 1st Lien Term Loan, Affirmed B3 (LGD3) from (LGD4) GTD Senior Secured 1st Lien Revolving Credit Facility, Affirmed B3 (LGD3) from (LGD4) Outlook Actions: Issuer: BVI Medical, Inc. Outlook, Changed To Stable From Positive RATINGS RATIONALE BVI's B3 CFR reflects small absolute size based on sales and narrow concentration within its chosen markets in ophthalmology. The rating also reflects Moody's expectations that debt/EBITDA will remain above six times for the next 12 to 18 months. Moody's expects revenues will be impacted for at least the next couple of quarters as elective procedures are deferred. However, Moody's expects the majority of planned procedures will occur, though the pace and timing of any recovery is uncertain. The company also competes against many larger competitors who have significantly greater financial resources. The rating is supported by BVI's long-standing presence in the cataract surgery materials, equipment and intraocular lens (IOL) market, strong operating margins, and a diverse global customer base. The company has also largely completed the integration of the February 2019 acquisition of PhysIOL, which the expanded the product portfolio into higher margin IOL offerings and provided cross-selling opportunities. The company has a good liquidity profile with cash and undrawn credit facilities exceeding $85 million. Moody's regards the coronavirus outbreak as a social risk under Moody's ESG framework, given the substantial implications for public health and safety. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. Although the medical device sector is less exposed from a demand standpoint than other sectors, the diversion of healthcare resources to treating the outbreak will reduce demand for some medical device products. In addition, global supply chains in the medical device are complex, and it is possible that supply disruptions will cause product delays and affect revenue of some products. Its rating actions reflects the impact on BVI of the breadth and severity of the shock and the broad deterioration in credit quality it has triggered. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if the company achieves consistent and profitable sales growth, positive free cash flows and successfully concludes the integration of PhysIOL. Quantitatively ratings could be upgraded if BVI sustains debt/EBITDA below 6 times while maintaining a good liquidity profile. Ratings could be downgraded if elective vision procedures remain deferred beyond its current expectations, free cash flow is negative for an extended period of time, or if liquidity otherwise erodes. Headquartered in Waltham, Massachusetts, BVI Medical, Inc. (BVI) is a global manufacturer of products used in eye surgeries (primarily cataract procedures). BVI was acquired by private equity firm TPG Capital in August 2016. Pro forma for the acquisition of intraocular lens manufacturer PhysIOL, revenue for the twelve months ended June 30, 2019 was approximately $280 million. BW NHHC: Bank Debt Trades at 43% Discount ----------------------------------------- Participations in a syndicated loan under which BW NHHC Holdco Inc is a borrower were trading in the secondary market around 57 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The US$185 million term loan is scheduled to mature on November 15, 2025. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. CALIFORNIA PIZZA: Bank Debt Trades at 58% Discount -------------------------------------------------- Participations in a syndicated loan under which California Pizza Kitchen Inc is a borrower were trading in the secondary market around 43 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD290 million term loan is scheduled to mature on August 23, 2022. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. CAPITAL AUTOMOTIVE: Bank Debt Trades at 17% Discount ---------------------------------------------------- Participations in a syndicated loan under which Capital Automotive LP is a borrower were trading in the secondary market around 83 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD690 million term loan is scheduled to mature on March 24, 2025. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. CAROUSEL CENTER PROJECT: Moody's Cuts PILOT Revenue Bonds to Ba3 ---------------------------------------------------------------- Moody's Investors Service, Inc. has downgraded the Syracuse Industrial Development Agency, NY's Carousel Center Project, NY Series 2007B, Series 2016A, and Series 2016B PILOT Revenue Bonds to Ba3 from Ba2 and placed the ratings on review for downgrade. The downgrade and review follow the transfer of the subordinate $300 million CMBS loan to special servicing owing to the unprecedented circumstances related to the coronavirus outbreak that resulted in Governor Cuomo issuing a statewide executive order to close all malls on March 18, 2020. RATINGS RATIONALE The downgrade to Ba3 reflects its view that the issuer's overall credit risk has increased owing to the unprecedented coronavirus outbreak and subsequent public health response that resulted in the closure of all malls in New York State on March 18, 2020. This was followed by similar orders in the region and ultimately resulted in the interior closure of nearly all malls in the United States. This has created unprecedented credit stress on the sector including Carousel Center Project L.P. Moody's believes this reduces the potential for meaningful equity support and results in full reliance on the CMBS loan servicer to provide the project with liquidity and a loan extension as the CMBS loan was transferred to special servicing on April 14, 2020. The CMBS loan servicer is Wells Fargo. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. More specifically, the mall's exposure to reduced revenue from the closure, which the mall was already experiencing prior to the coronavirus outbreak, has left it vulnerable in these operating conditions. The Ba3 rating incorporates the $31 million PILOT bond debt service reserve fund compared to the $21 million of debt service due in 2020, providing material liquidity before a PILOT bond payment default would occur. Even if the DSRF is exhausted, the mortgage loan servicer has also agreed to pay any PILOT bond shortfalls as well. This sound liquidity reduces the likelihood of a payment default on the PILOT bonds but does not insulate the project from the broader credit stress on the mall and the industry that is likely to remain pressured for several years. The Ba3 rating also incorporates the mall's established market position with limited competition in the Syracuse region that supports a decently predictable cashflow base that will remain pressured for several more. Moody's acknowledges the PILOT bond protections, whereby they are in lieu of the annual tax payments due on the property and cannot be accelerated. Similarly, the value of the property and potential revenue generating capacity should comfortably exceed the principal on the PILOT bonds. However, the borrower for the CMBS loan is Carousel Center Company L.P., the same obligor of the PILOT revenue bonds, which potentially exposes the PILOT bonds to the broader credit stress of the borrower and a bankruptcy filing if the CMBS loan experiences further stress, the property loses value from continued weak operations, and the issuer is not able to come to terms with the CMBS loan servicer outside of a formal insolvency proceeding. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS During the rating review, Moody's will focus on whether the CMBS loan servicer extends the CMBS loan as Moody's expects and under what terms before it matures on June 6th; if the Carousel Center Company L.P. has to contribute additional equity to reduce the loan owing to the prior negotiated NOI Debt Yield requirement not being met given current unprecedented events; when the mall will reopen and in what capacity in a post-coronavirus operating environment; the impact of the coronavirus and a subsequent recession on all retail tenants and their ability to reopen the mall in the future and at what rent level; and the feasibility of Carousel Mall's business plan to improve operations in a post-coronavirus operating environment owing to the rising annual debt service obligations on the senior PILOT bonds through their debt maturity in 2036. LEGAL SECURITY The PILOT bonds are special obligations of SIDA, secured solely by the trust estate and funds held by the bond trustee pledged to secure the bonds, including scheduled PILOT payments for the existing Carousel Center (pursuant to a PILOT agreement between the Carousel owner and SIDA). The PILOT bonds are senior to the subordinate $300 million CMBS loan except under an unlikely casualty, condemnation, or eminent domain scenario. A cash-funded debt service reserve fund (DSRF) held under a guaranteed investment contract at $30.9 million satisfies the DSRF requirement of 125% of average annual debt service. OBLIGOR PROFILE Carousel Center Company, L.P. is a New York limited partnership and a single purpose entity with the sole purpose of owning and operating the Carousel Center. Syracuse Industrial Development Agency, NY (SIDA) is a public benefit corporation established to enhance the city's economic development, and has acted as the financing conduit by issuing the bonds on behalf of the Carousel Center Company, L.P. METHODOLOGY The principal methodology used in these ratings was Generic Project Finance Methodology published in November 2019. CAST & CREW: S&P Downgrades ICR to 'B-'; Outlook Negative --------------------------------------------------------- S&P Global Ratings lowered its rating on California-based media and entertainment payroll services provider Cast & Crew Payroll LLC to 'B-' from 'B'. S&P is also lowering its rating on the company's first lien facilities to 'B' from 'B+'. The recovery rating remains unchanged at '2', indicating its expectation of 70%-90% recovery (rounded estimate: 75%) in the event of a default. COVID-19 lockdown measures will continue to hinder entertainment production activity, thereby pressuring Cast & Crew's adjusted leverage to remain above 7x for at least the next 12 months. "As restrictions on production activity persist, Cast & Crew's path to credit metric improvement has been extended such that we now expect leverage to remain above 7x well into 2021. Since the company's leveraged buyout by EQT Partners at the start of 2019, various operational difficulties and re-levering acquisitions have kept leverage in the high-7x area even prior to the COVID-19 related business disruption. Our previous forecast had considered the company's solid footing as a leading payroll services provider within the high-growth entertainment media production space to provide a supportive path to improving credit metrics; however, we now believe cancelled or delayed projects will delay the potential for improvement, thereby extending a record of operating with very high debt leverage," S&P said. The negative outlook reflects the potential for negative cash flow generation and materially weakened liquidity should production suspensions continue beyond mid- to late 2020, or if recovery in entertainment production spending does not ramp to pre-coronavirus levels as quickly as expected due to various forms of continued social distancing practices. S&P could lower the rating on Cast & Crew if a prolonged period of materially low payroll activity results in either of the following: -- Multiple quarters of negative free cash flow that stresses S&P's view of available liquidity to below the $30 to $35 million range, or if its view of the company's covenant headroom narrows to a single digit percent area such that a near-term covenant violation could be imminent absent relief. -- The other wholly owned subsidiaries of Cast & Crew's ultimate parent (Camera Holdings L.P.) experience business or financial distress. In this scenario, S&P would conclude that stress at these subsidiaries, which are outside of the credit group, could have adverse repercussions for Cast & Crew's credit quality. S&P could revise the outlook to stable if the rebound in production spending is quicker than expected, allowing the company to return to positive cash flow generation and thereby restore its liquidity position and projected covenant cushion to above 15%. At the same time S&P would expect resumed production to support its expectations for a sustainable path to improving credit metrics. CDS US: Bank Debt Trades at 57% Discount ---------------------------------------- Participations in a syndicated loan under which CDS US Intermediate Holdings Inc is a borrower were trading in the secondary market around 43 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD799 million term loan is scheduled to mature on July 8, 2022. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. CEC ENTERTAINMENT: Moody's Cuts CFR to Caa3, Outlook Negative ------------------------------------------------------------- Moody's Investors Service downgraded CEC Entertainment, Inc.'s corporate family rating to Caa3 from Caa1, its probability of default rating to Caa3-PD from Caa1-PD, its first lien term loan and revolving credit facilities to Caa2 from B3, and its senior unsecured notes to Ca from Caa3. The company speculative grade liquidity rating of SGL-3 was revised to SGL-4. The ratings outlook remains negative. The downgrade considers the likelihood that closure of on-premise dining, entertainment and arcade rooms at all company-operated Chuck E. Cheese and Peter Piper Pizza restaurant units will continue for longer than initially anticipated as well as the company's announcement that it has established a board level restructuring committee which indicates increased default risk. Moody's believes CEC faces a slow recovery once operations are allowed to open because consumers will be reluctant to bring children or allow young adults to go to enclosed venues such as Chuck E. Cheese, and so the current capital structure is not sustainable over the long term. The SGL-4 reflects the risk that the company's liquidity is insufficient to support the cash burn and near term debt maturities beyond the fall, the eventual need for covenant waivers and the springing maturity of its capital structure. The maturity of CEC's revolver and term loan springs to November 15, 2021, in the event that more than $50 million of the Company's 8% senior unsecured notes maturing 2/15/2022 remain outstanding 91 days prior to this date. The negative outlook reflects continuing unit closures and the likelihood a restructuring will result in impairment to debtholders. Downgrades: Issuer: CEC Entertainment, Inc. Probability of Default Rating, Downgraded to Caa3-PD from Caa1-PD Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-3 Corporate Family Rating, Downgraded to Caa3 from Caa1 Senior Secured Bank Credit Facility, Downgraded to Caa2 (LGD3) from B3 (LGD3) Senior Unsecured Regular Bond/Debenture, Downgraded to Ca (LGD5) from Caa3 (LGD5) Outlook Actions: Issuer: CEC Entertainment, Inc. Outlook, Remains Negative RATINGS RATIONALE The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The restaurant sector will be one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in the credit profile of restaurant companies, including their exposure to travel disruptions, widespread unit closures and discretionary consumer spending have left them vulnerable to shifts in market sentiment in these unprecedented operating conditions and the companies remain vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its actions reflect the impact on casual dining restaurants of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. CEC Entertainment, Inc. is constrained by its high leverage and weak coverage prior to the pandemic, the stress units closures have place on liquidity, and the high likely the company will need to restructure its capital structure as a result. The ratings are supported by CEC's meaningful scale, technology investments, such as PlayPass, and reasonable level of brand awareness. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be downgraded if the company files for bankruptcy protection, misses interest or principal payments or if recovery expectations decline. Ratings could be upgraded if the company successfully addresses its debt maturities on economic terms and maintains adequate liquidity. CEC Entertainment, Inc., headquartered in Irving, Texas, owns, operates, and franchises a total of 612 Chuck E. Cheese stores and 129 Peter Piper Pizza locations that provide family-oriented dining and entertainment in 47 states and 16 foreign countries. CEC is wholly owned by an affiliate of Apollo Global Management, LLC. Revenue for the last twelve-month period ended 12/31/2019 (including franchise fees and royalties) was approximately $913 million. CEDAR FAIR: Moody's Rates New $875MM Senior Secured Notes 'Ba2' --------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to Cedar Fair, L.P.'s proposed $875 million senior secured notes. Moody's also confirmed Cedar Fair's corporate family rating at B2, probability of default rating at B2-PD, senior unsecured notes at B3, and senior secured credit facility rating at Ba2. The speculative grade liquidity rating was upgraded to SLG-3 from SGL-4. The outlook was changed to negative from on review for downgrade. These actions conclude the review for downgrade that was initiated on March 20, 2020 and maintained under review following the downgrade of ratings on April 7, 2020. The net proceeds of the proposed $875 million senior secured notes due 2025 are expected to be used to repay $464 million of the existing term loan B with the balance of the proceeds added to the balance sheet for general corporate purposes. Cedar Fair also received an amendment to its credit agreement to ensure compliance with its financial leverage covenant and will upsize the existing revolver to $375 million from $275 million previously. Assignments: Issuer: Cedar Fair, L.P. $875 million Senior Secured notes due 2025, assigned Ba2 (LGD2) Confirmations: Issuer: Cedar Fair, L.P. Corporate Family Rating, confirmed at B2 Probability of Default Rating, confirmed at B2-PD Senior Secured Term Loan B, confirmed at Ba2 (LGD2) Senior Secured Revolving Credit Facility, confirmed at Ba2 (LGD2) Gtd Senior Unsecured Regular Bond/Debentures, confirmed at B3 (LGD5) Issuer: Canada's Wonderland Company Senior Secured Revolving Credit Facility, confirmed at Ba2 (LGD2) Upgrades: Issuer: Cedar Fair, L.P. Speculative Grade Liquidity Rating, upgraded to SGL-3 from SGL-4 Outlook actions: Issuer: Cedar Fair, L.P. Outlook, changed to negative from Ratings Under Review for downgrade Issuer: Canada's Wonderland Company Outlook, changed to negative from Ratings Under Review for downgrade RATINGS RATIONALE The confirmation of ratings reflects Cedar Fair's strengthened liquidity position and reduced reliance on its revolving credit facility due 2022. Moody's projects that Cedar Fair will have sufficient liquidity to manage through to the start of the 2021 operating season even if the amusement parks remain closed in 2020. Pro forma for the transaction, cash on the balance sheet is projected to be over $400 million with access to a recently upsized $375 million revolver (with $130 million drawn) for combined liquidity of approximately $650 million including cash and current revolver availability. Interest expense will be materially higher as a result of the transaction with pro forma leverage increasing to 5.5x from 4.5x as of Q4 2019. The improved liquidity and potential amendment to its financial covenant contributed to the upgrade of Cedar Fair's SLG to SGL-3 from SGL-4. The B2 CFR reflects the negative impact of the coronavirus outbreak on Cedar Fair's ability to operate its parks, which Moody's projects could substantially impact operating performance and lead to materially negative free cash flow of approximately $90 million of cash burn a quarter if the parks remain closed. While 2020 could be a very challenging year with a substantial deterioration in Cedar Fair's credit metrics, Moody's expects that performance in 2021 would return to levels more in line with prior years. Given the material cash balance and revolver availability, Moody's projects that Cedar Fair will have more than enough liquidity even if the parks are closed through 2020. While interest expense and debt levels are projected to be higher at the start of the 2021 season due to the transaction, Moody's expects Cedar Fair will be focused on debt reduction once the parks open, following the suspension of its dividend. If the parks open for a material portion of the 2020 season, Cedar Fair's attendance levels are projected to be below normal levels as consumers may maintain a degree of social distancing and avoid large crowds, as well as discretionary spending weakness due to challenging economic conditions. Recent cost saving efforts to support liquidity while the parks are closed may also slow the rate of improvement in performance. Pro forma leverage is 5.5x as of Q4 2019 (including Moody's standard adjustments) and is expected to rise substantially if the parks are unable to open. However, with the re-opening of parks and an economic recovery, Moody's expects leverage to be in the mid 5x range by the end of 2021. Cedar Fair benefits from its typically sizable attendance (27.9 million in 2019) and revenue generated from a geographically diversified regional amusement park portfolio. EBITDA margins and operating cash flows historically have been good, and its parks have high barriers to entry. Cedar Fair's large portfolio of regional amusement parks in the US and Canada are less likely to be impacted by reduced travel activity and offer the possibility that some of the parks may be able to open earlier than others and provide a source of cash flow to the company. Cedar Fair owns the land under almost all of its parks which is a material positive. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The amusement park sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Cedar Fair's credit profile, including its exposure to discretionary consumer spending have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Cedar Fair remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Cedar Fair of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. A governance impact that Moody's considers in Cedar Fair's credit profile is the change in financial policy. Cedar Fair previously pursued an aggressive financial plan that led to substantial dividend payments and minimal or negative free cash flow, but Moody's expects the company will operate with a more moderate financial policy with the goal to reduce leverage after the impact of the coronavirus subsides. Cedar Fair is an MLP and is a publicly traded company listed on the New York Stock Exchange. Cedar Fair' speculative grade liquidity rating of SGL-3 reflects the potential for material amounts of negative free cash flow if the parks remain closed during the upcoming summer season. Cedar Fair is projected to have over $400 million of cash and a $375 million revolver due 2022 (upsized from $275 million) with $130 million drawn pro forma for the transaction. Cedar Fair traditionally spent material amounts on capex each year ($180 million spent in 2019, excluding the purchase of the land at its park in Santa Clara for $150 million), but the company is expected to reduce capex going forward to support liquidity. The significant historical capex on rides, attractions, and lodging reduces the need for material spending in the near term. The dividend was also recently suspended to preserve liquidity. The maximum debt to EBITDA covenant is 5.5x for the life of the loan and Cedar Fair maintained slightly more than a 20% cushion of compliance as of Q4 2019, but Cedar Fair recently received an amendment to suspend the covenant for the rest of 2020. The negative outlook incorporates Moody's expectation of significant operating losses and cash usage due to the coronavirus outbreak's impact on Cedar Fair's ability to operate its parks. Prolonged park closures will lead to materially negative free cash flow and increase leverage levels substantially. If the parks open in the near term, Moody's expects performance will be weighed down by a weak economic environment and the potential for consumers to maintain social distancing and avoid large crowds. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade is unlikely as long as the coronavirus limits the ability to operate Cedar Fair's amusement parks. The outlook could change to stable if the parks are opened and Cedar Fair maintains an adequate liquidity profile with leverage levels projected to be maintained below 6x. Expectations that Cedar Fair would remain in compliance with its covenants would also be required. An upgrade could occur if leverage was projected to be maintained below 5x with a free cash flow to debt ratio of about five percent. The ratings could be downgraded if Moody's expected sustained leverage above 6.5x or an EBITDA to interest ratio below 2x. Elevated concern that Cedar Fair may not be able to obtain an amendment to its covenants if needed, may also lead to a downgrade as would a weakened liquidity position. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Cedar Fair, L.P., headquartered in Sandusky, Ohio, is a publicly traded Delaware master limited partnership formed in 1987 that owns and operates amusement parks, water parks, and hotels in the U.S. and Canada. Properties include its four largest parks, Cedar Point, Knott's Berry Farm, Canada's Wonderland, and Kings Island. In June 2006, Cedar Fair acquired Paramount Parks, Inc. from CBS Corporation for a purchase price of $1.24 billion. In 2019, Cedar Fair bought two water parks in Texas for approximately $261 million. Revenue for the LTM ending Q4 2019 was approximately $1.5 billion. CENTRAL SECURITY: Bank Debt Trades at 58% Discount -------------------------------------------------- Participations in a syndicated loan under which Central Security Group Inc is a borrower were trading in the secondary market around 42 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD40 million term loan is scheduled to mature on October 6, 2021. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. CENTRALSQUARE TECHNOLOGIES: Bank Debt Trades at 17% Discount ------------------------------------------------------------ Participations in a syndicated loan under which Centralsquare Technologies LLC is a borrower were trading in the secondary market around 83 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD955 million term loan is scheduled to mature on August 29, 2025. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. CENTURION PIPELINE: Moody's Cuts Rating on $350MM Term Loan to B1 ----------------------------------------------------------------- Moody's Investors Service has downgraded Centurion Pipeline Company LLC's ratings, including its Corporate Family Rating to B1 from Ba3, Probability of Default Rating to B1-PD from Ba3-PD, the rating of its $350 million senior secured term loan to B1 from Ba3 and rating of its $100 million senior secured revolving credit facility to B1 from Ba3. The rating outlook is stable. Downgrades: Issuer: Centurion Pipeline Company LLC Probability of Default Rating, Downgraded to B1-PD from Ba3-PD Corporate Family Rating, Downgraded to B1 from Ba3 Senior Secured Revolving Credit Facility, Downgraded to B1 (LGD3) from Ba3 (LGD3) Senior Secured Term Loan, Downgraded to B1 (LGD3) from Ba3 (LGD3) Outlook Actions: Issuer: Centurion Pipeline Company LLC Outlook, Remains Stable RATINGS RATIONALE The downgrade of the CFR to B1 reflects rising financial and liquidity risks in 2020. Moody's expects Centurion's revenues and cash flow to decline significantly, compared to its prior expectations, even as the company continues to benefit from material minimum volume commitments provisions, including from Occidental Petroleum Corporation (Ba1 review for downgrade). Centurion has low maintenance investment requirements and has certain flexibility in managing its growth investment commitments. Moody's expects that the company is likely to continue funding its participation in the strategic Wink-to-Webster pipeline project, where it holds a minority stake. This sizable investment combined with expected decline in earnings, will drive free cash flow generation in 2020 and will weaken leverage and liquidity profile. The stable outlook on the ratings reflects the overall strong starting balance sheet at the end of 2019 and significant support to cash flows from the existing MVC commitments. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The midstream sector has been one of the sectors significantly affected by the shock given its sensitivity to levels of oil and gas production and refining activity, which Moody's expects to decline in 2020. More specifically, the weaknesses in Centurion's credit profile have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Centurion remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Centurion of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Centurion's adequate liquidity position is supported by cash balances and its $100 million senior secured revolving credit facility expiring in 2023, that remained undrawn at the end of 3Q 2019. Both the senior secured facility and secured term loan are subject to a debt service coverage ratio covenant of at least 1.10x. In addition, the revolving credit facility is subject to a maximum net leverage ratio of 4.75x net debt/EBITDA. Moody's expects the company to be in compliance with these covenants through 2020. Centurion Pipeline Company LLC is the issuer of the $350 million senior secured term loan and the $100 million senior secured revolving credit facility. The $350 million senior secured term loan due 2025 and $100 million senior secured revolving credit facility expiring in 2023 are rated B1, the same as the Corporate Family Rating. Both the term loan and the revolver have a pari passu first-lien claim to substantially all of Centurion's assets. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Centurion ratings may be downgraded if its liquidity position were to weaken further or if its leverage were to increase with debt/EBITDA exceeding 4x. While not likely in the near term, the ratings may be upgraded if Centurion maintains good liquidity and low leverage with debt/EBITDA around 2x, maintains high quality of counterparty risk exposures and returns to growth in EBITDA amid a general recovery in the industry. The principal methodology used in these ratings was Midstream Energy published in December 2018. Centurion Pipeline Company LLC, is a wholly-owned subsidiary of Lotus Midstream, LLC, a company headquartered in Sugar Land, Texas, that is focused on the development of midstream infrastructure and services necessary to transport crude oil and condensate from the Permian Basin. The company was established at the beginning of 2018 and is backed by EnCap Flatrock Midstream, a venture capital group with a focus on investing in North American midstream assets. CHECKERS HOLDINGS: $193M Bank Debt Trades at 43% Discount --------------------------------------------------------- Participations in a syndicated loan under which Checkers Holdings Inc is a borrower were trading in the secondary market around 57 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The US$193 million term loan is scheduled to mature on June 30, 2024. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. CHECKERS HOLDINGS: $88M Bank Debt Trades at 53% Discount -------------------------------------------------------- Participations in a syndicated loan under which Checkers Holdings Inc is a borrower were trading in the secondary market around 47 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD88 million term loan is scheduled to mature on June 30, 2025. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. CHECKOUT HOLDING: Bank Debt Trades at 62% Discount -------------------------------------------------- Participations in a syndicated loan under which Checkout Holding Corp is a borrower were trading in the secondary market around 38 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD150 million PIK term loan is scheduled to mature on August 15, 2023. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. CHESAPEAKE ENERGY: Bank Debt Trades at 58% Discount --------------------------------------------------- Participations in a syndicated loan under which Chesapeake Energy Corp is a borrower were trading in the secondary market around 42 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD1.5 billion term loan is scheduled to mature on June 23, 2024. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. CHIFLEZ CORP: Unsecureds Unimpaired Under Plan ---------------------------------------------- Chiflez Corp. filed a Reorganization Plan that says payments and distributions under the Plan will be funded by (1) proceeds from the sale of non-debtor real estate owned by the Debtor's principal Carlos Segarra and (2) proceeds from operations. The bankruptcy filing was necessitated by a New York City Marshal's levy and intent to sell the Debtor's assets, and due to several Fair Labor Standards Act proceedings against the Debtor and its affiliate Cositas Ricas Equatorianas Corp. in the District Court for the Eastern District of New York. Under the Plan, the class 1 secured claim of the IRS will be paid in full in regular installments paid over a period not exceeding 5 years from the order of relief. Class 2 General Unsecured Claims are unimpaired. Unsecured claims will be paid in full on the effective date of the Plan plus interest at the rate of 2.04%. Under the Plan, Class 3 equity interest holders will retain their interests. A full-text copy of the Disclosure Statement dated April 1, 2020, is available at https://tinyurl.com/wcqb7rb from PacerMonitor.com at no charge. Attorneys for the Debtor: LAWRENCE F. MORRISON BRIAN J. HUFNAGEL MORRISON TENENBAUM PLLC 87 Walker Street, Floor 2 New York, New York 10013 Telephone: (212) 620-0938 Facsimile: (646)390-5095 About Chiflez Corp. Chiflez Corp. operates a Latin cuisine restaurant located at 95-02 Roosevelt Avenue, Jackson Heights, NY 11372. Juan Carlos Segarra supervises everything that happens with the business. Carlos Segarra is the 100% owner of the Debtor and Juan Carlos Segarra is the President. On June 18, 2019, Chiflez Corp. filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 19-43748). The Debtor was estimated to have less than $1 million in both assets and liabilities. MORRISON TENENBAUM, PLLC, is the Debtor's counsel. CIAOBABYONMAIN LLC: Wants Until July 6 to File Plan --------------------------------------------------- Judge Janet S. Baer has ordered that CiaoBabyOnMain LLC's deadline to file a plan and disclosure statement is extended through and until July 6, 2020. The Debtor's counsel: Jonathan D. Golding, Esq. THE GOLDING LAW OFFICES, P.C. 500 N, Dearborn Street, 2nd Floor Chicago, IL 60654 Tel: (312) 832-7892 Fax: (312) 755-5700 E-mail: jgolding@goldinglaw.net About CiaoBabyOnMain CiaoBabyOnMain, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 19-16814) on June 12, 2019. At the time of the filing, the Debtor estimated assets of less than $50,000 and liabilities of less than $500,000. The case is assigned to Judge Janet S. Baer. The Golding Law Offices, P.C., is the Debtor's counsel. COLOGIX HOLDINGS: Bank Debt Trades at 17% Discount -------------------------------------------------- Participations in a syndicated loan under which Cologix Holdings Inc is a borrower were trading in the secondary market around 83 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The US$135 million term loan is scheduled to mature on March 21, 2025. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. COOL HOLDINGS: Secures $3.1 Million Loan Under CARES Act -------------------------------------------------------- Cool Holdings Inc. entered into a promissory note for $3,098,000 with City National Bank of Florida pursuant to the U.S. Small Business Administration Paycheck Protection Program under Title I of the Coronavirus Aid, Relief, and Economic Security ("CARES") Act passed by Congress and signed into law on March 27, 2020. The Note is unsecured, bears interest at 1% per annum, with interest deferred for the first six months, and matures in two years. The principal is payable in equal monthly installments, with interest, beginning on the 10th day of the first month after the interest deferment period. Subject to compliance with applicable provisions of the CARES Act, the Company may apply to Lender for forgiveness of the principal amount of the Note in an amount equal to the sum of the following costs incurred by the Company during the 8-week period after the first disbursement of the Note: (i) payroll, (ii) rent and (iii) utilities. Not more than 25% of the amount forgiven can be attributable to non-payroll costs. Additionally, certain acts of the Company, including but not limited to: (i) the failure to pay any taxes when due, (ii) becoming the subject of a proceeding under any bankruptcy or insolvency law, (iii) making an assignment for the benefit of creditors, or (iv) reorganizing, merging, consolidating or otherwise changing ownership or business structure without Lender's prior written consent, are considered events of default which grant Lender the right to seek immediate payment of all amounts owing under the Note. About Cool Holdings Cool Holdings, Inc., formerly known as InfoSonics Corporation -- http://www.coolholdings.com-- is a Miami-based company currently comprised of Simply Mac and OneClick, two chains of retail stores and an authorized reseller under the Apple Premier Partner, APR (Apple Premium Reseller) and AAR MB (Apple Authorized Reseller Mono-Brand) programs and Cooltech Distribution, an authorized distributor to the OneClick stores and other resellers of Apple products and other high-profile consumer electronic brands. Cool Holdings reported a net loss of $27.27 million for the year ended Dec. 31, 2018, compared to a net loss of $7.54 million for the year ended Dec. 31, 2017. As of Sept. 30, 2019, the Company had $29.57 million in total assets, $41.07 million in total liabilities, and a total stockholders' deficit of $11.50 million. Kaufman, Rossin & Co., P.A., in Miami, Florida, the Company's auditor since 2018, issued a "going concern" qualification in its report dated April 16, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing that the Company's significant operating losses raise substantial doubt about its ability to continue as a going concern. CREATIVE HAIRDRESSERS: Case Summary & 20 Top Unsecured Creditors ---------------------------------------------------------------- Two affiliates that concurrently filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Creative Hairdressers, Inc. (Lead Case) 20-14583 1577 Spring Hill Road Suite 500 Vienna, VA 22182 Ratner Companies, L.C. 20-14584 1577 Spring Hill Road Suite 500 Vienna, VA 22182 Business Description: Founded in 1974, Creative Hairdressers, Inc. is an independent family owned chain of hair salons, providing comprehensive services for both female and male guests. It presently owns and operates approximately 800 hair salon locations, including approximately 100 locations in the State of Maryland. Ratner Co. provides management services to CHI and certain other affiliated entities. Chapter 11 Petition Date: April 23, 2020 Court: United States Bankruptcy Court District of Maryland Debtors' Counsel: Joel I. Sher, Esq. Richard M. Goldberg, Esq. Daniel J. Zeller, Esq. Anastasia L. McCusker, Esq. SHAPIRO SHER GUINOT & SANDLER, P.A. 250 W. Pratt Street, Suite 2000 Baltimore, Maryland 21201 Tel: 410-385-4277 Fax: 410-539-7611 Email: jis@shapirosher.com rmg@shapirosher.com djz@shapirosher.com alm@shapirosher.com Debtor's Financial Advisor: CARL MARKS ADVISORS Debtor'S Real Estate Advisor: A&G REALTY PARTNERS Debtor's Noticing Agent: EPIQ BANKRUPTCY SOLUTIONS https://dm.epiq11.com/case/hcu/dockets Creative Hairdressers' Estimated Assets: $1 million to $10 million Creative Hairdressers' Estimated Liabilities: $10 million to $50 million Ratner Companies' Estimated Assets: $50,000 to $100,000 Ratner Companies' Estimated Liabilities: $10 million to $50 million The petitions were signed by Phil Horvath, president & COO. Copies of the petitions are available for free at PacerMonitor.com at: https://is.gd/PQCHEN https://is.gd/LXcOEy Consolidated List of Debtors' 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. E K McConkey and Co Inc. Legal $568,115 2555 Kingston Road, Suite 100 York, PA 17402 Contact: Gary Warren Tel: (610) 458-3659 Fax: (717) 755-9237 Email: info@ekmcconkey.com 2. Engie Insight Services Inc. Utilities $514,957 1313 N Atlantic St Suite 5000 Spokane, WA 99201-2330 Contact: Steve Pittman Client Service Director Tel: (434) 660-8907 3. Mid Atlantic Construction LLC Maintenance $514,843 Union Meeting Corporate Center 925 Harvest Drive, Suite 220 Blue Bell, PA 19422 Contact: Tom Clifford Tel: (440) 227-8747 Email: tom@mac440.com 4. Salesforce Dot Com Inc. Information $379,308 Salesforce Tower Systems 415 Mission Street, 3rd Floor San Francisco, CA 94105 Contact: Viktoriya Zhukhovitzkaya Tel: (650) 450-3909 Fax: (415) 901-7040 5. Tomax Corporation Information $313,245 5 Wall Street Systems Burlington, MA 01803 Contact: Bill Kennedy Tel: (801) 230-2524 Email: wkennedy@salesforce.com 6. Infor US Inc. Information $311,232 641 Avenue of the Americas Systems New York, NY 10011 Contact: Kirk Downs Tel: (646) 336-1700 Email: kirk.downs@infor.com 7. Global Printing Marketing $273,676 D/B/A More Vang 3670 Wheeler Ave. Alexandria, VA 22304 Contact: Shari Fox Tel: (703) 785-0446 Email: sfox@morevang.com 8. Megapath Information $262,065 D/B/A GTT Communication Systems 7460 Warren Parkway Dallas, TX 75034 Contact: Lisa Schimir Tel: (571) 635-8844 Email: lisa.schmir@gtt.net 9. John Paul Mitchell Systems Merchandising $260,802 20705 Centre Pointe Parkway Vendors Santa Clarita, CA 91350 Contact: Jason Jates Tel: (713) 410-0499 Email: jason.yates@jpms.com 10. FedEx Supply Chain Inc. Merchandising $260,702 700 Cranberry Woods Drive Vendors Cranberry TWP, PA 16066 Contact: Matt Caron Tel: (717) 760-9746 Email: matthew.caron@fedex.com 11. La Dove Inc. Merchandising $259,155 5701 Miami Lakes Dr Vendors Hialeah, FL 33014 Contact: Joey Cecio Tel: (954) 740-1788 Fax: (305) 625-6058 Email: jcecio@ladove.com 12. Zimmerman Advertising LLC Marketing $229,901 6600 North Andrews Avenue Ft. Lauderdale, FL 33309 Contact: Michael Goldberg, CEO Tel: (954) 644-4227 Email: michaelgoldberg@zadv.com 13. Fedex Freight Merchandising $229,000 1715 Aaron Brenner Drive Vendors Suite 600 Memphis, TN 38120 Contact: Jason Rottman Tel: (301) 461-7400 Email: jason.rottmann@fedex.com 14. ITS A 10 Haircare Merchandising $196,644 4613 N University Drive Unit 478 Vendors Coral Springs, FL 33067 Contact: Jeff Aronson Email: jeff@itsa10haircare.com 15. Olaplex Inc. Merchandising $162,001 1187 Coast Village Road Unit 1 Vendors 520 Santa Barbara, CA 93108 Contact: Jeff Schwartz Tel: (707) 373-4389 Email: jeff@olaplex.com 16. Session M Inc. Marketing $150,000 2 Seaport Lane 11th Floor Boston, MA 02210 Contact: Mike Schrier VP, Customer Success Tel: (404) 452-9151 Email: mschrier@sessionm.com 17. Red Iron Information $133,275 42 Fletcher Hill Lane Suite 100 Systems Groton, MA 01450 Contact: Herb Cline Tel: (978) 885-0660 Email: herb.cline@redinrontech.com 18. Uniwest Construction $131,617 122 South 4th Avenue Pasco, WA 99301 Contact: Joe Riley Tel: (703) 698-4040 Email: jriley@uniwestco.com 19. Office Depot Inc. Operations $129,916 6600 North Military Trail Boca Raton, FL 33496 Contact: Debbie Brown Tel: (757) 334-3390 Email: debbie.brown@officedepot.com 20. XCO Software LLC Information $107,860 1064 Silent Ridge Court Systems McLean, VA 22102 Contact: Alan Hayman Tel: (240) 731-9099 Email: ahayman@xcosoftware.com CREATIVE HAIRDRESSERS: Enters Chapter 11 to Sell to Tacit Salon --------------------------------------------------------------- Creative Hairdressers, Inc., an operator of salon brands including Hair Cuttery, BUBBLES and Salon Cielo, on April 23, 2020 announced an agreement to sell its assets to HC Salon Holdings, Inc., an affiliate of Tacit Salon Holdings, LLC, along with a plan designed to significantly reduce its debt obligations and establish a sound financial platform for long-term growth. The company plans to re-open its salons when local and state authorities determine it is safe for employees and customers to return in wake of the COVID-19 crisis. Creative Hairdressers has entered into an asset purchase agreement with HC Salon Holdings, Inc., an affiliate of Tacit Salon Holdings, LLC, to acquire substantially all its assets, including the majority of its salon locations. In addition, as the senior secured lender, HC Salon Holdings, Inc., an affiliate of Tacit Salon Holdings, LLC, has agreed to provide the Company with debtor-in-possession financing that will allow the Company to continue operations, effectuate the sale process and fund operating expenses, including its payroll and other obligations to employees. "We are extremely pleased to have reached a positive outcome that enables us to pay our talented salon professionals, field leaders and resource center associates, and then reopen our doors and save thousands of jobs for our outstanding salon staff," said Phil Horvath, President of Creative Hairdressers, Inc. "These have been unprecedented and trying times for everyone, and especially for our industry. Our new financial partners are excited about the long-term potential in our industry and our ability to rebound post-crisis. We look forward to re-opening our doors and building a stronger future for our business." To implement the plan, Creative Hairdressers, Inc. and its affiliate Ratner Companies, L.C., filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the District of Maryland. The Company does not expect the filing will have a meaningful impact on its day-to-day business once its salons are able to re-open and expects to complete the sale process within 45 days. "We're happy to support Creative Hairdressers and its thousands of salon professionals as the company emerges from the COVID-19 crisis in a stronger financial position," stated Azhar Quader, Chairman of Tacit Salon Holdings, LLC. "Hair salons are an important contributor to the fabric of life in communities across the country. We're focused on saving jobs for salon professionals and building a strong, financially healthy company. We look forward to having Creative Hairdressers' talented stylists provide excellent service to their customers for many years to come." 800 Locations CHI was founded in 1974 by Dennis Ratner and Ann Ratner. CHI operated under the Hair Cuttery, Bubbles and Cielo brands. CHI is incorporated under the laws of the Commonwealth of Virginia. CHI has become one of the nation’s largest independent family owned chain of hair salons, providing comprehensive services for both female and male guests. It presently owns and operates approximately 800 hair salon locations, including approximately 100 locations in the State of Maryland.2 Prior to being forced to suspend its operations as a result of the Covid-19 crisis, CHI employed over 10,000 full and part time employees. For the fiscal year ending September 2019, CHI had approximately $440,000,000 in revenues. Because CHI was in covenant (but not payment) default with its primary secured lender in 2019, CHI had retained the investment banking firm of Houlihan Lokey in an effort to raise capital or refinance its existing debt. The Ratner family also invested over $7 million into CHI in the form of subordinated debt an effort to provide it working capital. In addition, as a condition to CHI’s pre-petition senior secured lenders entering into a forbearance arrangement with it, Dennis Ratner provided CHI additional credit support and a limited guaranty secured by marketable securities up to four million dollars. HL approached strategic buyers in order to gauge the ability to sell CHI. HL widely "shopped" CHI over a one year period and provided information, due diligence or other offering materials to over 100 entities, including private equity firms, strategic buyers and investors. HL was unable to find any entity willing to buy, invest in or provide financing to CHI on a secured or unsecured basis. In March 2020, various states, starting with Pennsylvania began ordering the closing of retail locations such as CHI. By the third week of March, CHI, without any real warning, was forced to close all of its locations and furlough most of its employees. At that point in time, CHI only had sufficient funds to meet its payroll obligations for the two-week period ending March 14, 2020. Due to the sudden government-ordered closures of its locations, CHI could not meet a lag payroll in the approximate amount of $2.9 million for the one week period after March 15, 2020 and through March 21, 2020, the date CHI was finally required to close all of its locations. About Tacit Salon Holdings Tacit Salon Holdings, LLC ("TSH"), a socially responsible investment platform committed to sustainability, gender equality and diversity inclusion, is a holding company formed to acquire salon platforms in the $47 billion hair care industry in the United States. TSH provides capital and infrastructure and teams up with industry leaders to acquire, reposition, and grow hair care assets in a socially responsible way. About Creative Hairdressers Creative Hairdressers, Inc. -- http://www.ratnerco.com/-- operates over 750 salons nationwide under the trade names Hair Cuttery, BUBBLES, and Salon Cielo. The company began in 1974 to create a quality whole-family salon where stylists could make a good living. Today, the family of salons continues to share this commitment with a transparent, people-first culture that offers the best career trajectory in the industry for salon professionals, field leaders and corporate employees. Creative Hairdressers and Ratner Companies, L.C., sought Chapter 11 protection (Bankr. D. Md. Case No. 20-14583 and 20-14584) on April 23, 2020. Creative Hairdressers was estimated to have $1 million to $10 million in assets and $10 million to $50 million in liabilities. Creative Hairdressers is represented by Shapiro Sher Guinot & Sandler. Carl Marks Advisors is acting as strategic financial advisor to assist the Company in the process. A&G Realty Partners is the real estate advisor. Epiq Bankruptcy Solutions is the claims agent. HC Salon Holdings, Inc. is represented by DLA Piper LLP (US). CSI COMPRESSCO: Moody's Cuts CFR to Caa1 & Alters Outlook to Neg. ----------------------------------------------------------------- Moody's Investors Service downgraded CSI Compressco LP's Corporate Family Rating to Caa1 from B3 and its Probability of Default Rating Ca-PD from B3-PD. Moody's also downgraded Compressco's senior secured first lien notes rating to B3 from B1, and its senior unsecured notes rating to Caa3 from Caa2. The The outlook was changed to negative from stable. The downgrade reflects the company's intention to issue new secured debt to exchange for up to $252 million of its senior unsecured notes at a 25% to 30% discount to par, a transaction Moody's views as a distressed exchange and thus, a default. Upon successful completion of the exchange, an "--/LD" (limited default) signifier will be appended to Compressco's PDR for a period of three days to acknowledge the default. Downgrades: Issuer: CSI Compressco LP Probability of Default Rating, Downgraded to Ca-PD from B3-PD Corporate Family Rating, Downgraded to Caa1 from B3 Senior Secured Notes, Downgraded to B3 (LGD3) from B1 (LGD2) Senior Unsecured Notes, Downgraded to Caa3 (LGD6) from Caa2 (LGD5) Outlook Actions: Issuer: CSI Compressco LP Outlook, Changed To Negative From Stable RATINGS RATIONALE Compressco's Caa1 CFR reflects the company's continued high debt balances and weak leverage metrics, even when considering likely debt reduction from the company's proposed debt exchange, and the companies small compressor fleet relative to its rated peers. Compressco will struggle to limit utilization and pricing declines during 2020 as its E&P customers seek to slash their operating and capital budgets in the face of a historic collapse in oil prices. The company is taking aggressive actions to staunch losses and preserve cash, including substantial workforce reductions, compensation cuts, a large drop in capital spending and potential asset sales. Still, Moody's expects 2020 EBITDA to fall below $100 million, resulting in debt/EBITDA at or above 6x post-exchange, with the likelihood that elevated leverage could persist through 2021. Relative to other oilfield service providers, Compressco benefits from comparatively stable cash flows, underpinned by services that enhance oil and gas production and are more likely to remain in use during a downturn than drilling or completion-oriented equipment, and Moody's expects the company to generate modest free cash flow in 2020. The company's shift in recent years to a higher proportion of large horsepower compression units should help limit the impact on margins and utilization compared to the 2015/16 downturn. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The oilfield services sector has been one of the sectors most significantly affected by the shock given its sensitivity to demand and oil prices. More specifically, the weaknesses in Compressco's credit profile have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Compressco remains vulnerable to the outbreak continuing to spread and oil prices remaining weak. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Compressco of the breadth and severity of the oil demand and supply shocks, and the broad deterioration in credit quality it has triggered. Compressco's senior secured first lien notes are rated B3, one notch above the Caa1 Corporate Family Rating, reflecting their priority claim to Compressco's assets, excluding the assets securing the asset-based revolver. The Caa3 senior unsecured notes rating reflects the first lien notes' priority claim relative to the senior unsecured notes, which results in the senior unsecured notes being rated two notches beneath the Caa1 CFR. Compressco's debt obligations are non-recourse to its general partner owner Tetra, and are therefore evaluated on a standalone basis in terms of its LGD analysis. Compressco' SGL-3 Speculative Grade Liquidity Rating reflects adequate liquidity into 2021, given the company's minimal cash requirements. The company had $2.4 million in cash at December 31, 2019. Compressco also had $17.7 million of availability under its $50 million asset-based revolving credit facility, which matures in March 2024. The revolver is subject to a springing fixed charge coverage ratio in the event that liquidity or revolver availability falls below a certain threshold. The company's next debt maturity is in 2022 when the senior unsecured notes mature, of which Moody's expects less than $50 million to be outstanding should the exchange be completed successfully. Compressco has limited other sources of liquidity, given that its assets are encumbered. The negative outlook reflects the steep challenges Compressco faces in its efforts to limit utilization and pricing declines and the potential that a continuation of very low oil prices into 2021 could further erode the company's credit profile. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be downgraded if liquidity deteriorates significantly, interest coverage falls below 2x, or debt/EBITDA rises above 7x. A ratings upgrade is not likely in the near term, however ratings could be upgraded if debt/EBITDA falls below 5.5x and EBITDA is sustained above $110 million. CSTN MERGER SUB: Moody's Cuts CFR & Senior Secured Rating to 'B3' ----------------------------------------------------------------- Moody's Investors Service downgraded CSTN Merger Sub, Inc.'s (d.b.a. Cornerstone Chemical Company) Corporate Family Rating to B3 from B2 and its senior secured global notes rating to B3 from B2. These actions are a result of the expectation for weaker financial performance and reduced availability under its ABL facility in 2020 due to the weaker demand and commodity prices arising from the economic impact from the coronavirus pandemic. The outlook is negative as the timeframe for a sustained improvement in industrial demand and improving commodity prices is uncertain. "Cornerstone's EBITDA is expected to decline by double digits in 2020 due to reduced industrial demand and lower commodity margins," said John Rogers, Senior Vice President and lead analyst for CSTN. "Moreover, Moody's expects a significant decline in industrial demand and durable goods end markets starting in the second quarter." Downgrades: Issuer: CSTN Merger Sub, Inc. Corporate Family Rating, Downgraded to B3 from B2 Probability of Default Rating, Downgraded to B3-PD from B2-PD Senior Secured Regular Bond/Debenture, Downgraded to B3 (LGD4) from B2 (LGD4) Outlook Actions: Issuer: CSTN Merger Sub, Inc. Outlook, Changed To Negative From Stable RATINGS RATIONALE The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The downgrade to B3 and the negative outlook reflects uncertainty of the depth and duration of the downturn in demand and profitability that the company will experience as a result of the coronavirus. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Cornerstone from the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The company's B3 rating is supported by its position as the second largest producer of acrylonitrile and the only producer of melamine in the US. The company facility is considered critical to the supply/demand balance in the US for these two products and supports the operation of much larger downstream chemical operations. The rating is constrained by its limited liquidity, the likely increase in leverage over the next three quarters and single site risk related to its facility in Waggaman. As of December 31, 2019, Moody's-adjusted credit metrics were 6.9x Debt/EBTIDA and Retained Cash Flow/Debt (RCF/Debt) of 7.7%. Moody's adjustments add $32.6 million to debt and boost EBITDA by $6.9 million. The company's leverage is expected to peak at over 8x in 2020 as a result of the coronavirus. Cornerstone liquidity is weak with less than $30 million of liquidity at year end 2019 and roughly $27 million at the end of the first quarter. The availability under it $90 million ABL facility could be constrained further by reduced demand and lower commodity prices. The company has been successful in getting its bank group to modestly increase the advance rates under the facility, it will benefit from an inflow of working capital over the next three quarters and has taken steps to significantly reduce capital spending. Despite these efforts, Moody's remains concerned that the company may need to access other sources of liquidity that may be under disadvantageous terms during the coming downturn. The company has a springing fixed charge coverage ratio under the facility, which is triggered when availability is under $6 million or 12.5% of the borrowing base. The negative outlook reflects Moody's view that credit metrics and liquidity will remain challenged over the next 12-18 months due to uncertainty over the degree to which demand for the company's products and prices for its commodity products are impacted by the downturn. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's would likely consider a downgrade, if Cornerstone's liquidity falls below $15 million. An upgrade is unlikely at this time due to the expected economic downturn as a result of the coronavirus, but in the future, if liquidity improves to over $50 million on a sustained basis and Moody's-adjusted leverage declines toward 6.5x an upgrade is likely. ESG CONSIDERATIONS Environmental, social, and governance factors are important considerations in Cornerstone's credit quality. The company is exposed to environmental and social risks typical for a commodity chemical company, such as accidental chemical spills or releases and social concerns due to the size and location of its production facility. The company does not have any accrued environmental liabilities but does have asset retirement obligations of roughly $7 million. However, this will not hurt its credit profile given the long tail nature of these liabilities. The company's governance is considered weak due to its ownership by the private equity firm Littlejohn & Co. and their control of the Board and financial policies that include relatively high leverage. Headquartered in Waggaman, LA, CSTN Merger Sub., Inc., more commonly known as Cornerstone Chemical Company, produces base chemicals such as acrylonitrile, urea, melamine, and sulfuric acid. Private equity firm Littlejohn & Co. bought Cornerstone in August 2017 from H.I.G. Capital, which has owned the company since the carve-out from Cytec Industries in February 2011. Revenues are under $500 million. The principal methodology used in these ratings was Chemical Industry published in March 2019. CYTOSORBENTS CORP: FDA Grants Breakthrough Designation to CytoSorb ------------------------------------------------------------------ The U.S. Food and Drug Administration (FDA) has granted Breakthrough Designation to CytoSorb for the removal of ticagrelor in a cardiopulmonary bypass circuit during emergent and urgent cardiothoracic surgery. The Breakthrough Devices Program provides for more effective treatment of life-threatening or irreversibly debilitating disease or conditions, in this case the need to reverse the effects of ticagrelor in emergent or urgent cardiac surgery that can otherwise cause a high risk of serious or life-threatening bleeding. Through Breakthrough Designation, FDA will work with CytoSorbents Corporation to expedite the development, assessment, and regulatory review of CytoSorb for the removal of ticagrelor, while maintaining statutory standards of regulatory approval (e.g., 510(k), de novo 510(k) or premarket approval (PMA)) consistent with the Agency's mission to protect and promote public health. Ticagrelor (Astra Zeneca - Brilinta, Brilique) is one of the most commonly used anti-platelet drugs or "blood thinners" to reduce the risk of cardiac death, heart attacks, and strokes in patients with acute coronary syndrome (ACS; i.e., situations where the blood supplied to the heart is suddenly blocked) or a history of a heart attack. It is also used to reduce the rate of stent thrombosis in patients who have been stented for treatment of ACS. However, when patients on ticagrelor require emergent cardiac surgery (e.g., coronary artery bypass graft surgery or CABG, dissecting aortic aneurysm repair, infective endocarditis, etc.), the risk of serious or life-threatening bleeding and complications is very high. There are no approved or cleared therapies in the U.S. to rapidly reverse the effects of, or remove ticagrelor in these patients. Mr. Vincent Capponi, chief operating officer of CytoSorbents stated, "We are excited to receive FDA Breakthrough Designation of CytoSorb for the removal of ticagrelor during emergent and urgent cardiothoracic surgery. This breakthrough designation represents another constructive regulatory step forward on the heels of the recent Emergency Use Authorization (EUA) granted by FDA for use of CytoSorb in critically-ill COVID-19 patients. We believe this represents an important step towards our goal of obtaining U.S. regulatory approval of CytoSorb for this indication. Following the E.U. approval of CytoSorb to remove ticagrelor during cardiothoracic surgery, we believe this Breakthrough Designation presents a unique opportunity to accelerate the approval process and availability of CytoSorb in the U.S., where no other alternatives are approved. We appreciate the Agency's positive decision and look forward to working with them to define the regulatory path for approval." Dr. Phillip Chan, MD, PhD, chief executive officer of CytoSorbents added, "Ticagrelor is a blockbuster anti-platelet agent that is used widely in patients with ischemic cardiac disease, but is also associated with significant bleeding risk. For example, in the "Study of Platelet Inhibition and Patient Outcomes (PLATO) trial, the incidence of "major fatal/life-threatening" CABG-related bleeding in patients admitted with signs and symptoms of a heart attack, who were administered ticagrelor as part of dual-antiplatelet therapy, was approximately 65% in patients who required emergent CABG within a day, and more than 40% in patients who underwent urgent CABG within two to four days of receiving the last dose of ticagrelor. Of the three major P2Y12 platelet inhibitors - clopidogrel, ticagrelor, and prasugrel - it is currently believed that only the effect of ticagrelor is theoretically reversible. However, because of the absence of an effective reversal agent, this safety advantage has never been realized. We have already reported on a landmark observational study that showed the potential for a significant reduction in bleeding risk, and another study highlighting an approximate $5,000 projected costs savings, when CytoSorb is used with patients on ticagrelor undergoing emergent cardiac surgery, in comparison to patient outcomes when CytoSorb was not used. As we seek to leverage our E.U. approval abroad, we look to collaborate with the FDA under this Breakthrough Designation for the potential benefit of patients here as well." About CytoSorbents Based in Monmouth Junction, New Jersey, CytoSorbents Corporation is engaged in critical care immunotherapy, specializing in blood purification. Its flagship product, CytoSorb is approved in the European Union with distribution in 58 countries around the world, as an extracorporeal cytokine adsorber designed to reduce the "cytokine storm" or "cytokine release syndrome" that could otherwise cause massive inflammation, organ failure and death in common critical illnesses. These are conditions where the risk of death is extremely high, yet no effective treatments exist. As of Dec. 31, 2019, the Company had $27.38 million in total assets, $23.96 million in total liabilities, and $3.42 million in total stockholders' equity. WithumSmith+Brown, PC, in East Brunswick, New Jersey, the Company's auditor since 2004, issued a "going concern" qualification in its report dated March 5, 2020 citing that the Company sustained net losses for the years ended Dec. 31, 2019, 2018 and 2017 of approximately $19.3 million, $17.2 million and $8.5 million, respectively. Further, the Company believes it will have to raise additional capital to fund its planned operations for the twelve month period through March 2021. These matters raise substantial doubt regarding the Company's ability to continue as a going concern. CYTOSORBENTS CORP: Hikes Stock Offering by Additional $25M Shares ----------------------------------------------------------------- CytoSorbents Corporation is party to that certain Open Market Sale Agreement with Jefferies LLC and B. Riley FBR, Inc., dated July 9, 2019, pursuant to which the Company may offer to sell, from time to time through the Agents, shares of the Company's common stock, $0.001 par value per share having an aggregate offering price of up to $25 million. As of April 20, 2020, the Company had offered and sold Shares with an aggregate offering price of approximately $21 million under the Sale Agreement. On April 20, 2020, the Company and the Agents entered into an amendment to the Sale Agreement to provide for an increase in the aggregate offering amount under the Sales Agreement, such that as of April 20, 2020, the Company may offer and sell Shares having an additional aggregate offering price of up to $25 million under the Sale Agreement, as amended by the Amendment. Subject to the terms of the Amended Sale Agreement, the Agents will use reasonable efforts to sell the Shares from time to time, based upon the Company's instructions (including any price, time or size limits or other customary parameters or conditions the Company may impose). The Company cannot provide any assurances that it will issue any additional Shares pursuant to the Amended Sale Agreement. The Company will pay the Agents a commission of up to 3.0% of the gross proceeds from the sale of the Shares, if any. The Company has also agreed to provide the Agents with customary indemnification rights. The offering of the Shares will terminate upon the earliest of (a) the sale of the maximum number or amount of the Shares permitted to be sold under the Amended Sale Agreement and (b) the termination of the Amended Sale Agreement by the parties. About CytoSorbents Based in Monmouth Junction, New Jersey, CytoSorbents Corporation is engaged in critical care immunotherapy, specializing in blood purification. Its flagship product, CytoSorb is approved in the European Union with distribution in 58 countries around the world, as an extracorporeal cytokine adsorber designed to reduce the "cytokine storm" or "cytokine release syndrome" that could otherwise cause massive inflammation, organ failure and death in common critical illnesses. These are conditions where the risk of death is extremely high, yet no effective treatments exist. As of Dec. 31, 2019, the Company had $27.38 million in total assets, $23.96 million in total liabilities, and $3.42 million in total stockholders' equity. WithumSmith+Brown, PC, in East Brunswick, New Jersey, the Company's auditor since 2004, issued a "going concern" qualification in its report dated March 5, 2020 citing that the Company sustained net losses for the years ended Dec. 31, 2019, 2018 and 2017 of approximately $19.3 million, $17.2 million and $8.5 million, respectively. Further, the Company believes it will have to raise additional capital to fund its planned operations for the twelve month period through March 2021. These matters raise substantial doubt regarding the Company's ability to continue as a going concern. CYXTERA DC: Bank Debt Trades at 65% Discount -------------------------------------------- Participations in a syndicated loan under which Cyxtera DC Holdings Inc is a borrower were trading in the secondary market around 35 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD310 million term loan is scheduled to mature on May 1, 2025. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. DANA INC: S&P Lowers Term Loan B Rating to 'BB+' Following Add-On ----------------------------------------------------------------- S&P Global Ratings said it lowered its issue-level rating on Dana Inc.'s term loan B to 'BB+' from 'BBB-' and revised its recovery rating on the term loan to '2' from '3'. This change follows the add-on of $500 million senior secured bridge facility. S&P's 'BB-' issue-level and '5' recovery rating on Dana's senior unsecured notes are unchanged. The '5' recovery rating indicates S&P's expectation of modest (10%-30%; rounded estimate: 20%) recovery in the event of a default. "Our issuer credit rating on Dana remains 'BB', because the company will only use the bridge facility to increase liquidity should the impact from the global pandemic be worse than expected," S&P said. All ratings remain on CreditWatch with negative implications. ISSUE RATINGS – RECOVERY ANALYSIS Key analytical factors -- S&P valued the company on a going-concern basis using a 5x multiple of our projected emergence EBITDA. -- S&P estimates that for the company to default its EBITDA would need to decline significantly, representing a material deterioration from the current state of its business. Simulated default assumptions -- Simulated year of default: 2025 -- EBITDA at emergence: $437 million -- EBITDA multiple: 5x The new $500 million senior secured bridge loan is assumed to be fully drawn at default Simplified waterfall -- Net enterprise value (after 5% administrative costs): $1.94 billion -- Valuation split (obligors/nonobligors): 30%/70% -- Total value available to secured claims: $1.42 billion -- Recovery expectations: 90%-100% (rounded estimate: 70%) -- Total value available to unsecured claims: $462 million -- Senior unsecured debt and pari passu claims: $2.2 billion -- Recovery expectations: 10%-30% (rounded estimate: 20%) Note: All debt amounts include six months of prepetition interest. Collateral value equals asset pledge from obligors after priority claims plus equity pledge from nonobligors after nonobligor debt. Ratings List Issue Level Rating Lowered; Recovery Rating Revised To From Dana Incorporated Senior Secured BB+/Watch Neg BBB-/Watch Neg Recovery Rating 2(70%) 1(95%) Senior Unsecured US$300 mil 5.375% nts due 11/15/2027 Recovery Rating 5(20%) 5(25%) US$425 mil 5.50% sr nts due 12/15/2024 Recovery Rating 5(20%) 5(25%) Issue Level Rating Unchanged; Recovery Rating Revised To From Dana Financing Luxembourg S.a.r.l. Senior Unsecured US$375 mil sr nts due 2026 BB-/Watch Neg Recovery Rating 5(20%) 5(25%) US$400 mil 5.75% sr nts due 04/15/2025 BB-/Watch Neg Recovery Rating 5(20%) 5(25%) DIAMONDBACK INDUSTRIES: Seeks Chapter 11 Protection --------------------------------------------------- Diamondback Industries, Inc., which develops, manufactures, and sells setting tools, power charges, and igniters for use in completing oil and gas wells, has sought Chapter 11 protection. The Debtors have negotiated a term sheet for DIP financing with the Lender that provides for the advancement of a senior secured and superpriority debtor-in-possession term loan in the aggregate amount of up to $5,000,000. The Debtors plan to file a motion for approval of such debtor in possession financing shortly after the commencement of the Chapter 11 Case Cade Kennedy, CRO, explains that the Debtors' business and financial performance depend heavily on sales generated by a limited customer base -- i.e., oil and gas companies engaged in drilling and well services -- that purchase the Debtors' products. Despite unfavorable conditions in the oil and gas market over the last several years, the Debtors successfully maintained their operations. This year, however, the Debtors experienced an unexpected reduction in demand for their products resulting from the sudden, unprecedented, and precipitous drop in oil prices. Moreover, the Debtors' financial difficulties are compounded by the global events and macroeconomic effects of the COVID-19 pandemic. Many businesses, including the Debtors, have suffered from COVID-19's significant toll on the United States' and global economies. Further, a judgment of $40 million and a permanent injunction prohibiting Diamondback from making, selling, or offering to sell the SS 10 and SS 20 disposable setting tools was entered against Diamondback on April 3, 2020, by the District Court for the Western District of Texas in connection with a patent lawsuit among Diamondback, as plaintiff, Repeat Precision, LLC ("RP") as defendant and counterclaim-plaintiff, and NCS Multistage, LLC ("NCS-M"), and NCS Multistage Holdings, Inc. ("NCS-H" and together with RP and NCS-M, the "Patent Litigation Defendants"), as defendants. The dispute in the Patent Lawsuit generally centers around a patent license agreement (the "Patent License Agreement") by and between Diamondback and RP, pursuant to which Diamondback licenses certain rights to RP in connection with U.S. Patent No. 9,810,035 (the "035 Patent"). The 035 Patent is owned by Diamondback and covers disposable setting tools such as the SS 10 and SS 20. The Patent Lawsuit began in 2018 after Diamondback filed a complaint against the Patent Litigation Defendants alleging claims arising from and related to the Patent License Agreement, including breach of contract, misappropriation of trade secrets, and fraudulent inducement. In response, RP filed counterclaims against Diamondback, including claims for patent infringement and tortious interference. Ultimately, the court entered the Patent Judgment awarding damages to RP in the amount of $39,946,902, and awarding costs and attorneys' fees to the Patent Litigation Defendants in an amount to be determined. Federal Rule of Civil Procedure 62(a) provides that execution on a judgment and proceedings to enforce a judgement are stayed for 30 days after entry of a judgement, unless the court orders otherwise. Despite the existence of the 30-day stay, the Patent Defendants, only 5 days after the Patent Judgment was entered, filed an emergency motion seeking the extraordinary relief of lifting the 30-day stay imposed by Federal Rule of Civil Procedure 62(a) in order to expedite the enforcement of the Patent Judgment. Diamondback disputes the Patent Judgment and filed its notice of appeal of the Patent Judgment on April 21, 2020. The Patent Judgment constituted an event of default on the Debtors' Prepetition Credit Agreement, which entitled the lender to exercise its rights and remedies including, without limitation, the acceleration of the Debtors' payment obligations and foreclosure against all collateral. The Debtors also failed to make their April 1, 2020, principal payment, breached certain financial covenants of the Prepetition Credit Agreement, all of which also constituted events of default on the Debtors' Prepetition Credit Agreement. Fortunately, the Debtors were able to negotiate a forbearance with their lender until 11:00 a.m. (prevailing Central Time) on July 15, 2020 unless the Debtors breached or defaulted under the forbearance agreement or a subsequent event of default occurred pursuant to the Prepetition Credit Agreement. Notwithstanding the Forbearance, the Debtors determined that the filing of the Chapter 11 Cases was necessary to maximize value for the benefit of all creditors. "I believe that the Chapter 11 Cases will provide the Debtors with the best opportunity to preserve the business as a going concern through value preservation efforts including, without limitation, making any necessary changes to the Debtors' business plan and eliminating any burdensome contracts and lease obligations," Mr. Kennedy said. As of April 16, 2020, the Debtors' unaudited balance sheets reflected total assets of approximately $31.7 million, total liabilities of approximately $21.0 million (not including the Patent Judgment), and equity of approximately $10.7 million. The Debtors' principal assets consist of cash, accounts receivable, inventory, equipment, intellectual property rights, and fixed assets. The Debtors' prepetition debt structure primarily consists of (i) the Prepetition Credit Facility in the amount of $20 million, (ii) certain capital lease obligations, and (iii) $400 million of unsecured debt consisting of, among other things, amounts owed to vendors and landlords as well as the Patent Judgment, which the Debtors dispute and have appealed. About Diamondback Industries Diamondback Industries -- https://diamondbackindustries.com/ -- is an ISO 9001 registered company that manufactures tools and ballistics equipment including eliminators, igniters, and power charges. On April 21, 2020, Diamondback Industries, Inc., and its affiliates sought Chapter 11 protection (Bankr. N.D. Tex. Case No. 20-41504). The Hon. Edward L. Morris is the case judge. Diamondback was estimated to have $10 million to $10 million in assets and liabilities. The Debtors tapped HAYNES AND BOONE, LLP as counsel; and CR3 PARTNERS, LLC as financial advisor. STRETTO is the claims agent, maintaining the page https://cases.stretto.com/diamondback/ DIRECTORY DISTRIBUTING: Unsecureds Unimpaired Under Plan -------------------------------------------------------- John P. Vaclavek, the court-appointed Chapter 11 Trustee of Directory Distributing Associates, Inc., filed a proposed First Amended Plan of Liquidation for DDA. The Plan proposes to treat claims and interests as follows: * Class 1 (General Unsecured Claims). Unimpaired. On the Effective Date, or as soon thereafter as is reasonably practicable, each Holder of an Allowed General Unsecured Claim listed on Schedule 6.01 of the Plan shall receive, payment in full in Cash of such Allowed General Unsecured Claim. * Class 2 (FLSA Claims). Impaired. As soon as practicable after the Effective Date, each Holder of an Allowed FLSA Claim shall receive Cash from the FLSA Claims Trust as follows: (i) the DDA FLSA Individual Settlement Amount for such Holder; and (ii) if applicable, the Non-DDA FLSA Individual Settlement Amount for such Holder. * Class 3 (Publishers' Claims). Impaired. In full satisfaction of the Allowed Publishers' Claims and subject to and conditioned upon the Publishers payment in Cash when due of the Publishers’ Plan Funding Commitment to the FLSA Claims Trust, the Publishers shall receive their share of the FLSA Claims Trust Surplus Amount as described in Article VIII of the Plan and as calculated based on the Publishers’ Plan Funding Percentage. * Class 4 (Allowed FLSA Counsel Claims). Impaired. In full satisfaction of the Allowed FLSA Counsel Claims, the FLSA Claims Trustee shall tender to FLSA Counsel the sum of $4,000,000 on the Effective Date or as soon thereafter as practicable, with such distribution to be made in accordance with written instructions delivered to the FLSA Claims Trustee by the FLSA Counsel on or before the Confirmation Hearing. * Class 5 (Shareholders). Impaired. The Shareholders will not receive or retain any property under the Plan on account of their equity interests in the Debtor. As soon as practicable after the FLSA Claims Bar Date, and in no event later than two Business Days before the Confirmation Hearing, the Trustee will notify the Potential Avoidance Action Defendants and the Publishers of the amount that must be contributed to the FLSA Claims Trust or the Plan Administrator, as the case may be, on the Effective Date as a precondition to the Effective Date sufficient to (i) make the distributions to Holders of Allowed Claims, including any FLSA Claim Employment Related Taxes, (ii) satisfy the anticipated FLSA Trust Administration Expenses and Non-DDA Reserve Administrative Expenses, (iii) satisfy the anticipated Plan Administration Expenses, and (iv) establish the Disputed FLSA Claims Reserve (the "Plan Funding Commitment"). A full-text copy of the First Amended Plan of Liquidation dated April 1, 2020, is available at https://tinyurl.com/t8fzjy4 from PacerMonitor.com at no charge. Counsel for Chapter 11 Trustee John P. Vaclavek: David A. Warfield David D. Farrell THOMPSON COBURN LLP One US Bank Plaza – Suite 3200 St. Louis, MO 63101 Tel: (314) 552-6000 Fax: (314) 552-7000 E-mail: dwarfield@thompsoncoburn.com dfarrell@thompsoncoburn.com About Directory Distributing Associates Directory Distributing Associates, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mo. Case No. 16-47428) on Oct. 14, 2016. At the time of the bankruptcy filing, the Debtor was estimated to have assets of $1 million to $10 million, and liabilities at $100,000 to $500,000. The case is assigned to Judge Kathy A. Surratt-States. Carmody MacDonald P.C. is the Debtor's counsel. The Debtors hired McCarthy Leonard & Kaemmerer L.C. as special counsel for labor and employment class action matters; Carr Allison as special counsel for works compensation; Gold Weems as special counsel for workers compensation and subrogation litigation matters in Louisiana; Lewis Brisbois as special counsel; and Walker & Patterson, P.C. as special counsel. John P. Vaclavek has been named as Chapter 11 Trustee for the Debtor. The Trustee retained Thompson Coburn LLP as counsel; Carmody MacDonald, P.C. as special counsel; and Williams-Keepers LLC as accountant. An official unsecured creditors committee has not been appointed in the case. DISTRIBUTION INTERNATIONAL: S&P Alters Outlook to Negative ---------------------------------------------------------- S&P Global Ratings revised the outlook on Distribution International to negative from positive. The negative outlook reflects significant stress on revenue and liquidity and that earnings growth in 2020 is improbable, as well as that the company depends on favorable business, financial, and economic conditions to meet its financial commitments. S&P is affirming its 'CCC+' issuer credit rating on Distribution International as well as its 'CCC+' and 'CCC-' ratings on the company's first- and second-lien term loans, respectively. "We believe there will be significant erosion in North American end markets through 2020 that could persist into 2021. The company operates in the highly fragmented and competitive market of distributing thermal insulation to commercial and industrial (C&I) end users including oil and gas exploration and production (E&P), oil refining, and petrochemical processing. The company's sales are roughly tied to 45% industrial, 35% commercial construction, 20% metal building insulation and other gas-related operations, with 3% belonging to marine and other services. We expect Distribution International (DI) to face weak and uncertain markets in 2020 and 2021 as the Saudi Arabia-Russia price war and coronavirus fallout drives crude oil prices and C&I discretionary spending significantly lower. Furthermore, because S&P Global Ratings economists recently lowered their global GDP growth forecast to negative 5.2% in 2020, the outlook gets bleaker," S&P said. The negative outlook on DI reflects S&P's expectation that debt leverage will increase above 8x, while interest coverage declines towards 1x and the rating agency sees reduced free cash flow over the next 12 months. S&P believes the company is currently vulnerable and depends on favorable business, financial, and economic conditions to meet its financial commitments. The issuer's financial commitments appear to be unsustainable in the long term, although it may not face a near-term (within 12 months) credit or payment crisis. "We could lower the rating if DI can't reduce the rate of EBITDA decline, leading to performance shortfalls and weaker free cash flow. A downgrade would be contingent on our belief that DI's cash flow generation would be insufficient to cover cash interest payments and maintenance capital spending or pressured liquidity over the next 12 months. As such, a default on an interest payment or a covenant violation would likely lead to a downgrade. We could also lower our rating if we believe DI will likely engage in a distressed exchange in the next 12 months," S&P said. "We could revise the rating to stable if we believe that the potential for a default has become less likely. This could occur if the company generates adequate sales while maintaining healthy margins, resulting in sufficient cash flow to service interest, working capital requirements, and fund maintenance capital spending while maintaining adequate liquidity," S&P said. DJL BUILDERS: Unsecured Creditors to Recover 3% in Plan ------------------------------------------------------- DJL BUILDERS, INC. and DAVID J. LATAWIEC have formulated a Plan of Reorganization. DJL's sole source of income is its stream of revenue generated from the remodeling services provided to its customers. The Plan proposes to treat claims and interests as follows: * Class I: Class I will consist of the arrearage claims of the Debtors' executory contract holders, to the extent such exist at the time of confirmation. The Debtors do not believe there are any unpaid arrearage claims in connection with any executory contracts assumed by the Debtors. * Class III: Class III will consist of the unsecured Michigan Building Contract Fund Act (M.C.L. Sec. 570.151, et seq.) (the "MBCFA") claims of certain of the Debtors trade creditors (the "MBCF Claims"). The MBCF Claims will be paid in full in 60 equal monthly payments beginning on the 25th day of sixth full month after the Effective Date and continuing on the 25th day of each consecutive month until such claim is paid in full. The Class III claims total $141,825. * Class IV: Class IV will consist of the prepetition general unsecured non priority and non-MBCF Claims against the Debtors, including the trade vendor claims against DJL, the unsecured non-priority claims of the taxing authorities, and the general claims against Latawiec with a total claim of $241,469. The Debtors will make a 3 percent distribution to its Class IV creditors on a pro rata basis in 12 equal quarterly distributions beginning on the last business day of the first calendar quarter of 2022 and continuing on the last business day of each consecutive calendar quarter until paid in full. * Class V: Class V will consist of the claims of DJL's principal, David Latawiec, in connection with his equity interest in DJL. On or before the Effective Date, Debtor David Latawiec will transfer $5,000 to DJL in exchange for the retention of his shareholder interest in DJL. Other than the Class V Capital Infusion, payments to be made pursuant to this Plan shall be from funds derived from the DJL's business operations. A full-text copy of the Combined Plan and Disclosure Statement dated April 1, 2020, is available at https://tinyurl.com/wugkp9q from PacerMonitor.com at no charge. Attorneys for the Debtors: LYNN M. BRIMER PAMELA S. RITTER STROBL SHARP PLLC 300 East Long Lake Road, Suite 200 Bloomfield Hills, MI 48304-2376 Telephone: (248) 540-2300 Facsimile: (248) 645-2690 E-Mail: lbrimer@stroblpc.com About DJL Builders DJL Builders, Inc., is a Michigan corporation, founded by David J. Latawiec in 2009, which provides home remodeling services to homeowners in southeastern Michigan. David J. Latawiec is the sole shareholder. DJL Builders, Inc., filed a Chapter 11 petition (Bankr. E.D. Mich. Case No. 19-56856) on Nov. 29, 2019. Lynn M. Brimer, Esq. -- lbrimer@stroblpc.com -- at STROBL SHARP PLLC is the Debtor's counsel. DPW HOLDINGS: Court Preliminarily OKs Derivative Suit Settlement ---------------------------------------------------------------- A judge in U.S. District Court for the Central District of California issued an order on April 15, 2020, approving a Motion for Preliminary Approval of Settlement in the Derivative Action filed against DPW Holdings, Inc. as a Nominal Defendant and its directors who served on its board of directors on July 31, 2018. On Feb. 19, 2020, DPW entered into a definitive settlement agreement between Plaintiffs Ethan Young and Greg Young, derivatively on behalf of Nominal Defendant DPW against the Company's then directors and DPW itself, Case No. 2:18-cv-06578, filed in the California District Court on July 31, 2018. Under the terms of the Order approving the Agreement, the Company's Board of Directors will implement certain reforms to the Company's bylaws, committee charters, corporate governance policies, and the composition of the Board, including the resignation of a current director and the appointment of two new independent directors. In addition, the parties have agreed upon a payment of attorneys' fees in the amount of $600,000 payable by the Company's Director & Officer liability insurance. The Agreement contains no admission of wrongdoing. The Company has always maintained and continues to believe that neither it nor any of its directors engaged in any wrongdoing or otherwise committed any violation of federal or state securities laws or other laws. In its Order, the Court provided the following deadlines: (1) The fairness hearing for final approval of the proposed Agreement is set for June 29, 2020 at 1:30 p.m. PT. (2) A motion for final approval of the Agreement and the Fee and Expense Award shall be filed on or before June 1, 2020. (3) Any shareholder who wishes to object to the proposed Agreement must do so in writing. The deadline for sending written objections to the settlement is June 8, 2020. (4) The deadline for Plaintiff and/or Defendant to file any written response to shareholders' objections is June 22, 2020. Plaintiffs' Counsel must also submit any shareholders' written objections to the Court by June 22, 2020. While the Agreement has been approved by the Court, there can be no assurance that the settlement will be finalized and approved by the Court or properly objected to by any shareholders and, even if approved, whether the conditions to closing will be satisfied, and the actual outcome of this matter may differ materially from the terms of the settlement. The Stipulation and Agreement of Settlement, including its Exhibit A, which comprises the specific Reforms, can be found on the Company's website under the Investor Relations tab here: https://ir.dpwholdings.com/static-files/67cdcc90-d755-455d-bab0-362eca400b5e. The Notice can be found on the Company's website under the Investor Relations tab here: https://ir.dpwholdings.com/static-files/2373e8c1-b050-46fa-9194-42bdafde64d5. About DPW Holdings DPW Holdings, Inc. -- http://www.DPWHoldings.com/-- is a diversified holding company pursuing growth by acquiring undervalued businesses and disruptive technologies with a global impact. Through its wholly and majority-owned subsidiaries and strategic investments, the Company provides mission-critical products that support a diverse range of industries, including defense/aerospace, industrial, telecommunications, medical, crypto-mining, and textiles. In addition, the Company owns a select portfolio of commercial hospitality properties and extends credit to select entrepreneurial businesses through a licensed lending subsidiary. DPW's headquarters are located at 201 Shipyard Way, Suite E, Newport Beach, CA 92663. DPW Holdings incurred a net loss of $32.98 million in 2018, following a net loss of $10.89 million in 2017. As of Sept. 30, 2019, the Company had $47.42 million in total assets, $29.50 million in total liabilities, and $17.92 million in total stockholders' equity. Marcum LLP, in New York, the Company's auditor since 2016, issued a "going concern" qualification in its report dated April 16, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, stating that the Company has a significant working capital deficiency, has incurred significant losses, and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. DYNASTY ACQUISITION: S&P Lowers ICR to 'B-' on Lower Air Traffic ---------------------------------------------------------------- S&P Global Ratings lowered its ratings on U.S.-based Dynasty Acquisition Co. Inc. (StandardAero), including its issuer credit rating to 'B-' from 'B'. "We believe StandardAero's credit metrics to be weaker in 2020 than we previously expected as a result of the coronavirus. StandardAero is a maintenance, repair, and overhaul (MRO) provider, primarily for engines, to the North American aerospace and defense market. As a result of the coronavirus, many airlines have cut flights as demand has fallen. This will likely result in lower MRO demand as there is less wear and tear on the planes. In addition, older aircraft, which generally require higher levels of maintenance, likely won't return to services if air traffic remains low. The company's defense operations (about 15%-20% of sales) are not likely to be materially affected. We expect StandardAero's earnings and cash flow to weaken, resulting in debt to EBITDA above 8.5 in 2020 and 7x in 2021 compared to our previous expectations of 6x-6.5x and 5.x-6x in 2020 and 2021, respectively," S&P said. The negative outlook reflects S&P's expectation that StandardAero's credit metrics will weaken as a result of lower air traffic because of the coronavirus. S&P now expects debt to EBITDA to be above 8.5x in 2020, and that it could remain above 7x in 2021. "We could lower the ratings if the impact on StandardAero's earnings and free cash flow from the coronavirus is greater than we expect or the company's operations are significantly disrupted by government restrictions or employee illness, resulting in weaker liquidity. We could also consider a downgrade if sustained high leverage led us to believe that the company's capital structure is no longer sustainable over the long term," S&P said. "We could revise the outlook to stable over the next 12 months if we expect debt to EBITDA to remain below 7.5x and free operating cash flow to debt to remain positive. This would likely be the result of a quicker-than-expected recovery in air traffic driving higher aftermarket demand and the company successfully aligning its costs structure with likely near term demand," the rating agency said. E MECHANIC PLUS: Unsecureds to Get Distributions in Plan -------------------------------------------------------- E Mechanic Plus, Inc., filed a Plan of Reorganization. The Debtor's Plan will be funded by the current and future income generated by its regular operations and the rent paid by its tenants. The Plan is based upon the Debtor's belief that liquidation of the assets, would yield only minimal distribution, at best, to general unsecured creditors. Additionally, the priority and secured creditors would receive less than the contractual or legal obligations. The present management and ownership of the corporation will be retained post-confirmation. Steps will be taken to reduce overhead and expenses in order to effectuate repayment of the creditors in accordance with the Plan. The Plan proposes to treat claims as follows: * Each Allowed Secured Claim, at the election of the Debtor, may (i) remain secured by a Lien in property of the Debtor retained by such Holder, (ii) paid in full in cash (including allowable interest) over time or through a refinancing or a sale of the respective Asset securing such Allowed Secured Claim, (iii) offset against, and to the extent of, the Debtor’s claims against the Holder, or (iv) otherwise rendered unimpaired as provided under the Bankruptcy Code. * To the extent that the Holder of an Allowed Priority Claim receives a Distribution under the Plan, such Holder should recognize such Distribution as ordinary income and submit the appropriate withholdings based on that Holder’s particular circumstances. * Each Holder of an Allowed Unsecured Claim shall receive, on account of such Allowed Claim, a Pro Rata Distribution of Cash from the Plan Trust. To the extent the Holder of an Allowed General Unsecured Claim receives less than full payment on account of such Claim, the Holder of such Claim may be entitled to assert a bad debt deduction or worthless security deduction with respect to such Allowed Unsecured Claim. A full-text copy of the Disclosure Statement dated April 1, 2020, is available at https://tinyurl.com/t4es3qm from PacerMonitor.com at no charge. Attorney for the Debtor: Buddy D. Ford, Esquire Jonathan A. Semach, Esquire Heather M. Reel, Esquire BUDDY D. FORD, P.A. 9301 West Hillsborough Avenue Tampa, Florida 33615-3008 Telephone #: (813) 877-4669 Facsimile #: (813) 877-5543 Office Email: All@tampaesq.com E-mail: Buddy@tampaesq.com E-mail: Jonathan@tampaesq.com E-mail: Heather@tampaesq.com About E Mechanic Plus Based in Tampa, Fla., E Mechanic Plus Inc. is engaged in the ownership and operation of a mechanic repair shop. In addition, it leases out a portion of its real estate to two separate tenants. The company operates from its location at 8616 N. Nebraska Avenue, Tampa, Florida 33604. E Mechanic Plus Inc. filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 19-10891) on Nov. 15, 2019. At the time of the filing, the Debtor disclosed assets of between $100,001 and $500,000 and liabilities of the same range. Judge Michael G. Williamson oversees the case. Buddy D. Ford, P.A., is the Debtor's legal counsel. ELEMENT SOLUTIONS: S&P Affirms 'BB-' ICR, Alters Outlook to Neg. ---------------------------------------------------------------- S&P Global Ratings affirmed its 'BB-' issuer credit ratings on Element Solutions Inc. and its subsidiary, MacDermid Inc., and its 'BB-' issue-level ratings on its debt. S&P also revised the outlook to negative from stable. "The revision of the outlook to negative from stable incorporates our recent expectation for weaker earnings in 2020 and 2021 relative to our previous estimates. Our revised estimates incorporate the ongoing global economic downturn and related uncertainty in demand brought about by the COVID-19 pandemic. We now anticipate the FFO–to-total-debt ratio will be slightly above 12% on a weighted-average basis, with little room at the current rating for a greater earnings decline than our current projection. We previously expected a greater cushion at the rating. Our rating affirmation reflects our view that this ratio will remain in the 12% to 20% range despite weaker earnings. Element's credit quality benefits from the fact that year-end 2019, pre-recession, cushions under credit metrics were large at around 17%," S&P said. "The negative outlook on Element reflects our view that despite the potential for a significant demand contraction in some end markets, caused by the expected 2020 recession, we believe credit metrics will remain appropriate for the rating. However, we expect the FFO-to-total-debt ratio will weaken to levels approaching 12%, leaving very little cushion for a greater-than-expected earnings downturn," S&P said. A key assumption S&P makes is that the company will adhere to its stated long-term debt leverage target of 3.0x-3.5x. S&P anticipates the company will be prudent with its shareholder rewards, growth opportunities, and capital spending, especially during potential downturns, so that it can maintain its target debt leverage. "We could lower the ratings in the next year if we anticipate the FFO-to-debt ratio will drop below 12% with no immediate prospects for improvement. We could also lower the ratings if unexpected weakness in global demand or raw-material cost pressures weaken EBITDA significantly or margins drop more than 200 basis points (bps) relative to our expectations in 2020, combined with a greater drop of more than 500 basis points in 2021, result in a weaker FFO-to-debt ratio below our threshold," S&P said. "We could revise the outlook to stable in the next year if the earnings decline in our base case does not materialize to the extent we expect. In such a situation, we expect the FFO-to-total-debt ratio at year-end 2020 will be in the mid-teens area with some cushion for unexpected earnings downturns. We believe management will be committed to maintaining credit quality at current levels," the rating agency said. ELEVATE TEXTILES: Bank Debt Trades at 59% Discount -------------------------------------------------- Participations in a syndicated loan under which Elevate Textiles Inc is a borrower were trading in the secondary market around 42 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD125 million term loan is scheduled to mature on May 1, 2025. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. ELEVATE TEXTILES: S&P Downgrades ICR to 'CCC+'; Outlook Negative ---------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on North Carolina-based textile manufacturer Elevate Textiles Inc. to 'CCC+' from 'B-'. The outlook is negative. At the same time, S&P is lowering its issue-level rating on the company's first-lien credit facility to 'CCC+' from 'B-'. The recovery rating remains '3', indicating S&P's expectation for meaningful (50%-70%, rounded estimate: 50%) recovery in the event of a payment default. S&P is also lowering its issue-level rating on the company's second-lien term loan to 'CCC' from 'CCC+'. The recovery rating remains '5', indicating S&P's expectation for modest (10%-30%, rounded estimate: 15%) recovery in the event of a payment default. "The downgrade reflects the company's very high leverage, our expectation for negative cash flow generation, and reduced liquidity as a result of a material decline in demand because of the massive store closings due to the COVID-19 pandemic. The apparel industry has been affected by a severe demand drop as retail stores closed in an effort to slow the spread of the COVID-19 disease worldwide, which will reduce demand for Elevate as apparel retailers reduce and cancel orders for the upcoming season. Therefore, despite the drastic cost-saving measures the company has undertaken, such as significant salary reduction; furloughing of workers where plants are not operating, for example, in India and Bangladesh; and eliminating discretionary spending, we still expect the company's credit metrics and cash flow generation will significantly deteriorate in 2020. In addition, we believe the company's credit metrics will continue to be very weak in 2021 even as orders return, because we do not expect demand to return to pre-COVID-19 levels until sometime in 2022. Thus, given Elevate's high debt burden, we now expect leverage would peak above 10x in 2020 and the company will rely on revolving credit facility borrowings to finance operational, investment, and debt service requirements," S&P said. The outlook is negative, reflecting the risk the company will need to contemplate a restructuring or default within the next 12 months if the recession in the U.S. deepens, resulting in the company continuing to generate negative free cash flow. "We could lower our ratings if the company's operating performance fell well below our base case forecast, resulting in deeper and protracted levels of negative cash flow and an inability to fund its debt service requirements. This could result in a depletion of the company's cash and revolver availability, leading to the likelihood of a default event," S&P said. "We could revise the outlook to stable if the company were able to generate positive free cash flow of at least $10 million. We could take a positive rating action if Elevate weathered the COVID-19 pandemic and operations improved in 2021 such that the fixed-charge ratio improved to the mid-1x area. In addition, it would also require our expectation that the company will not likely engage in a distressed exchange to lessen its debt burden," the rating agency said. ENCINO ACQUISITION: Bank Debt Trades at 53% Discount ---------------------------------------------------- Participations in a syndicated loan under which Encino Acquisition Partners Holdings LLC is a borrower were trading in the secondary market around 47 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The US$550 million term loan is scheduled to mature on November 20, 2025. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. ENSIGN DRILLING: S&P Downgrades ICR to 'CCC+'; Outlook Negative --------------------------------------------------------------- S&P Global Ratings lowered its long-term issuer credit rating on Canada-based Ensign Drilling Inc. and its issue-level rating on the company's unsecured debt to 'CCC+' from 'BB-'. E&P companies have announced sharp cuts following the collapse in oil prices. S&P Global Ratings drastically lowered its oil price assumptions following demand concerns from the coronavirus pandemic, and the resulting price war between Saudi Arabia and Russia. "In particular, we expect crude oil prices to be significantly lower in 2020, including West Texas Intermediate (WTI) at US$25 per barrel for the rest of 2020. We also expect natural gas prices to remain pressured due to oversupply conditions in the U.S.," S&P said. Following the oil price collapse, E&P companies have drastically reduced activity in an attempt to align spending with internally generated cash flows. S&P believes E&P companies in the U.S. and Canada have cut their capital budgets by an average of 30%-40%. The negative outlook incorporates S&P's view that credit measures will remain weak over the next 12 months, with adjusted FFO-to-debt averaging 10% due to reduced drilling activity. The outlook also reflects the potential for liquidity to further weaken, if activity levels don't recover. "We could lower the ratings if the company generated significant negative free cash flow deficits such that liquidity deteriorated. This could occur if operating conditions weaken materially from current conditions, likely due to current oil prices persisting longer than envisioned, and a commensurate pullback in spending by the E&P industry," S&P said. "We could take a positive rating action if Ensign was able to alleviate pressure on the credit facility with maturity extended and indications from the banking syndicate on covenant reliefs. At the same time, we would expect the company to maintain weighted-average FFO-to-debt above 12%, while continuing to generate positive free operating cash flow. This could occur if oil prices rise, resulting in increased drilling activity," S&P said. FENDER MUSICAL: Moody's Alters Outlook on B1 CFR to Negative ------------------------------------------------------------ Moody's Investors Service revised Fender Musical Instruments Corporation's outlook to negative from stable. The company's B1 Corporate Family Rating, B1-PD Probability of Default Rating, and B2 rating on the company's $220 million senior secured term loan B due 2025, were affirmed. The negative outlook reflects that the coronavirus situation continues to evolve, and a high degree of uncertainty remains regarding the degree and pace at which consumer spending will recover. As a result, the company's liquidity and leverage could deteriorate quickly over the next few months. Moody's affirmed Fender's B1 CFR because modest 2.8x debt-to-EBITDA leverage as of September 2019 provides the company some cushion within the rating to absorb an earnings decline. The company also has adequate liquidity including no meaningful debt maturities until the revolver expires in 2023. Affirmations: Issuer: Fender Musical Instruments Corporation Probability of Default Rating, Affirmed B1-PD Corporate Family Rating, Affirmed B1 Senior Secured Bank Credit Facility, Affirmed B2 (LGD4) Outlook Actions: Issuer: Fender Musical Instruments Corporation Outlook, Changed To Negative From Stable RATINGS RATIONALE Fender's B1 CFR reflects the company's strong brand awareness. The Fender name is supported by the long-standing reputation and quality of its guitars and product innovation. This provides strong brand name recognition and significant barriers to entry for guitars, its flagship product. Fender is also one of the largest musical-instrument companies in the world. Approximately half of the company's sales are generated outside of North America, with about a third coming from Europe and remainder of approximate 15% coming from Asia. Fender's financial policy reflects use of moderate financial leverage to provide flexibility given its high sensitivity to economic downturns and periodic use of debt to finance acquisitions. In addition to the substantial uncertainty caused by the coronavirus pandemic, key credit risks include the non-essential, highly discretionary nature of consumer spending on musical instruments, Fender's relatively narrow product focus, and significant customer concentration. Guitar Center, Inc. (Caa3 negative) alone represents about 17% of Fender's revenues. Guitar Center is the largest private retailer of music products in the United States. As a result, a disruption of sales to Guitar Center will negatively impact Fender's performance. The B1 CFR also considers that Fender has adequate liquidity. The company currently has about $60 million in unrestricted cash, which is about four times its projected annual interest expense, and capital expenditures for the next 12-months will be relatively low, at about $20 to $25 million based on reduced business volumes. Reduced business volumes will also have a positive, albeit temporary, impact on generating cash from working capital. And other than a cash flow sweep subject to a leverage ratio, Fender has no mandatory term loan amortization since it has prepaid the $2.2 million of annual amortization. However, additional external liquidity sources in terms of revolver availability is limited since the company already drew down most of its $85 million asset-based revolver to bolster its cash position. Additionally, lower business volumes will likely push leverage closer to the company's total leverage term loan covenant of 5.5x. The ABL is subject to a minimum fixed charge coverage ratio of 1.0x that will be tested on a quarterly basis if excess availability plus cash is less than 12.5% of the total availability. If triggered, Moody's believes the company will meet this fixed charge coverage test as well as the term loan's total leverage covenant, but with less cushion than under more normal operating conditions. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The consumer durables sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Fender's credit profile, including its exposure to the highly discretionary musical instruments products, have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Fender remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Fender of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be downgraded if Moody's anticipates that any earnings decline or liquidity deterioration will be deeper or more prolonged because of actions to contain the spread of the virus or reductions in discretionary consumer spending. A ratings upgrade is unlikely given the weak operating environment and continuing uncertainty related to the coronavirus. An upgrade would require a high degree of confidence on Moody's part that consumer demand for musical instrument products has returned to a period long-term stability, and that Fender demonstrate the ability to generate positive free cash flow, maintain good liquidity, and continue to operate with a debt/EBITDA level at below 3.0x. Fender develops, manufactures and distributes musical instruments to wholesale and retail outlets throughout the world. The company's product portfolio includes fretted instruments (comprised of electric, acoustic and bass guitars and ukuleles), guitar amplifiers, audio systems, guitar pedals, other guitar accessories, and digital applications centered around musical education. Portfolio of brands include Fender, Squier, Bigsby, Jackson, and Charvel. The company also is a licensee of the Gretsch and Eddie Van Halen brands. Fender is majority owned by Servco Pacific Capital and Yamano, a Tokyo-based company with various music related operations. The company generates about $600 million of revenue per annum. FGI ACQUISITION: Bank Debt Trades at 18% Discount ------------------------------------------------- Participations in a syndicated loan under which FGI Acquisition Corp is a borrower were trading in the secondary market around 82 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD200 million term loan is scheduled to mature on October 29, 2026. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. FIELDWOOD ENERGY: Bank Debt Trades at 68% Discount -------------------------------------------------- Participations in a syndicated loan under which Fieldwood Energy LLC is a borrower were trading in the secondary market around 32 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD1143 million term loan is scheduled to mature on April 11, 2022. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. FITNESS INTERNATIONAL: S&P Downgrades ICR to 'CCC+'; Outlook Dev. ----------------------------------------------------------------- S&P Global Ratings lowered the issuer credit rating on Fitness International LLC (LA Fitness) to 'CCC+' from 'B' with a developing outlook, and lowered its issue-level ratings to 'B-' from 'B+'. The recovery rating remains '2'. At the same time, S&P removed all of the ratings on the company from Credit Watch, where S&P placed them with negative implications on March 20, 2020. "The downgrade reflects our assumption that LA Fitness will experience a spike in leverage and a significant cash burn rate while gyms are closed and possibly during the early months of re-openings, which could use a substantial portion of the company's liquidity and possibly result in an unsustainable capital structure. We assume no revenue while gyms are closed, and the beginning of recovery in the third quarter of 2020 under our base case for virus containment midyear 2020. In our base case, we estimate revenue could ramp to 50% of historical revenue in the third quarter of 2020, and improve further in the fourth quarter. It is our understanding the company had in excess of $325 million in cash on hand on April 1, 2020 after fully drawing its $400 million revolver." The company also amended its credit facility on April 7, 2020, to amend and waive certain covenants. This level of cash may be sufficient to cover the anticipated cash burn if the clubs reopen in the third quarter, but not during a prolonged period of club closures. Anticipated cash needs include debt service, and significantly reduced labor and non-rent occupancy costs while clubs remain closed. Depending upon how revenue ramps, the company may use cash for several months after clubs re-open while the company brings its employees back from furloughs, pays vendors to remain current, and brings facilities back online," S&P said. The developing outlook means an upgrade or downgrade are equally likely over the next 12 months depending on the duration of gym closures, economic conditions, consumer behavior, and the company's ability to preserve its liquidity. The upside reflects the possibility for leverage to improve under S&P's midyear recovery scenario to a level in line with a higher rating. The downside reflects the possibility the company may face a near-term default, in the absence of a liquidity-enhancing transaction, under its current cash burn rate if containment and club re-openings do not occur midyear. "We could lower our rating if we expect the company's liquidity position to worsen, or we believe the company is likely to default or enter into a debt restructuring of some form in the next 12 months," S&P said. "Although unlikely over the next several quarters and until gyms reopen and ramp up revenue, we could consider a one notch upgrade or more if we believe the company can sustain positive cash flow, and is likely to materially reduce leverage to below 7x following containment of COVID-19," S&P said. FLEXENTIAL INTERMEDIATE: Bank Debt Trades at 61% Discount --------------------------------------------------------- Participations in a syndicated loan under which Flexential Intermediate Corp is a borrower were trading in the secondary market around 39 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD310 million term loan is scheduled to mature on August 1, 2025. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. FOOT LOCKER: S&P Alters Outlook to Negative, Affirms 'BB+' ICR -------------------------------------------------------------- S&P Global Ratings revised its outlook to negative from stable and affirming all its ratings on New York-based athletic shoe and apparel retailer Foot Locker Inc., including the 'BB+' issuer credit rating. Severely pressured operating results will deteriorate credit metrics significantly this year. In response to the coronavirus outbreak, Foot Locker temporarily closed a majority of its stores in Hong Kong and Italy in February and all its stores across North America, Canada, and the remainder of Europe from mid-March. Closures could continue for an extended period given government actions to quell the rapid rise in new COVID-19 cases. While Foot Locker's online channel remains operational, it represents only a modest percentage of total revenues (about 15%) and current products lack newness given the pause on new merchandise releases. In addition, S&P believes consumer demand will be significantly depressed over the next few quarters as confidence rapidly declines due to a steep recession and elevated unemployment. As a result, S&P sees leverage spiking above 3x at the end of fiscal 2020 (ending Feb. 1, 2021), up from the mid-1x area at the end of fiscal 2019 (ended Feb. 1, 2020). As pressures alleviate beginning in the second half of calendar year 2020, S&P expects gradual improvement in Foot Locker's credit metrics, with leverage declining to 2x or less at the end of fiscal 2021. The negative outlook reflects the heightened uncertainty regarding the impact of the coronavirus pandemic and impending recession on Foot Locker's financial condition. A prolonged store closure, coupled with a slowdown in consumer spending, could affect the company's ability to recover operationally and maintain leverage below 3x in the next one to two years. "We could lower the rating if we expect Foot Locker will sustain leverage above 3x. This could occur if the impact of the coronavirus and subsequent recessionary macroeconomic environment are more severe and prolonged than we currently expect, delaying operating performance improvements in the second-half of the year. We could also lower the ratings if Foot Locker underperforms significantly due to material merchandising missteps, a lack of consumer demand (especially for Nike products), and increased competition. Under this scenario, we may conclude that the company's competitive standing and operating efficiency have weakened, leading us to assess its business less favorably," S&P said. "We could revise the outlook to stable if we expect the company to maintain leverage of less than 3x. If the company is able to recover from the impact of the coronavirus and we are confident the company can maintain its appeal to consumers in a recessionary environment, we would expect sales and earnings to stabilize at the end of this year and further rebound in 2021. In addition, we would have to believe macroeconomic conditions are more stable and the threat of the coronavirus pandemic has subsided," S&P said. FORD MOTOR: S&P Rates New Unsecured Notes BB+; Rating on Watch Neg. ------------------------------------------------------------------- S&P Global Ratings assigned its 'BB+' issue-level rating and '3' recovery rating to automaker Ford Motor Co.'s proposed unsecured notes. The '3' recovery rating indicates S&P's expectation for meaningful (50%-70%; rounded estimate: 65%) recovery for unsecured lenders in the event of a payment default. The ratings on these notes will be placed on CreditWatch with negative implications. "We expect the company to use the net proceeds for general corporate purposes. We expect the transaction to be roughly neutral for Ford's debt to EBITDA, which we estimate will remain under 1.5x over the next 12 months. As of April 9 and excluding this proposed issuance, Ford had about $30 billion in cash on its balance sheet," S&P said. On March 25, 2020, S&P downgraded Ford to 'BB+' from 'BBB-' and assigned 'BB+' issue-level ratings to the company's unsecured debt. All S&P ratings on Ford at that time were placed on CreditWatch with negative implications. "The CreditWatch negative reflects at least a 50% chance we could lower the rating on Ford because of longer-than-expected plant shutdowns or a potential economic recession leading to negative cash flow generation, eroding liquidity, and higher leverage. We expect to resolve the CreditWatch over the next 90 days, once we have a better understanding of how long light-vehicle production and demand will remain curtailed due to government efforts to contain the spread of the coronavirus," S&P said. FRANKLIN SQUARE: Moody's Alters Outlook on Ba1 CFR to Negative -------------------------------------------------------------- Moody's Investors Service has affirmed Franklin Square Holdings, L.P.'s Ba1 Corporate Family Rating and Ba1-PD probability of default rating. Moody's has also affirmed the senior secured Ba1 Backed Revolving Credit Facility and Backed Term Loan ratings assigned to the $100 million 5-year Revolving Credit Facility and $520 million 7-year Term Loan B, which are guaranteed by FSH and certain of its non-Borrower subsidiaries. At the same time, Moody's has changed the rating outlook to negative from stable. Summary of the rating actions: Franklin Square Holdings, L.P. -- Corporate Family Rating, affirmed at Ba1 -- Probability of Default Rating, affirmed at Ba1-PD Outlook Action: -- Outlook changed to negative from stable Rating actions for (1) FSJV Holdco, LLC, (2) FS Investment Advisor, LLC, (3) FS Global Advisor, LLC, (4) FS Energy Advisor, LLC, (5) FS Fund Advisor, LLC, (6) FS Real Estate Advisor, LLC, and (7) FS Credit Income Advisor, LLC, collectively the Borrowers: -- $100 million backed senior secured first lien Revolving Credit Facility due 2023 -- affirmed at Ba1 -- $520 million backed senior secured first lien Term Loan B due 2025 -- affirmed at Ba1 RATINGS RATIONALE The change in outlook to negative from stable reflects its expectation that the extreme market declines and increasing economic uncertainty unleashed by the coronavirus pandemic and oil price shock will cause the fair value of the company's assets under management to decline, resulting in lower management and incentive fee revenue and earnings in 2020, and potentially beyond. Consequently, Moody's believes that FSH's leverage could rise above 3.5x debt-to-EBITDA (Moody's adjusted basis) for a sustained period. Leverage was 3.3x at year-end 2019. About 16% of FSH AUM is exposed to a single business development company, FS Energy and Power Fund (FSEP; Ba3/RUR down), that invests primarily in private US energy and power companies, including a large number in the highly stressed exploration and production (E&P) sector. The recent collapse in oil prices will cause substantial realized and unrealized losses for FSEP and significantly lower management and incentive fee revenue for FSH. Moody's expects FSH's other closed-end vehicles, including FS KKR Capital Corp (Baa3/negative), to perform better as they have more modest exposure to the most at-risk sectors affected by the oil price shock and coronavirus outbreak. Still, Moody's expects upcoming portfolio valuation marks will result in lower AUM and material fee revenue declines for FSH. Positively, FSH has solid balance sheet liquidity and does not have any near-term refinancing risk because debt maturities are well laddered between 2023 and 2025. It is its expectation that, even under stress, FSH will generate sufficient free cash flow to cover its debt service requirements. The Ba1 CFR reflects FSH's strong recurring revenue base, healthy pre-tax income margins, and a leading competitive position within the retail alternative investments market. A high percentage of FSH's AUM is in permanent or semi-permanent capital vehicles which supports a highly recurring management fee revenue base. FSH's strengths are constrained by its high concentration in private middle-market credit, limited product and geographic diversification, and distribution concentration in the independent broker-dealer channel. While exhibiting solid growth historically, revenue scale is lower than investment-grade peers. Product and geographic diversification is also limited when compared to the wider investment management industry, particularly investment grade peers, as FSH is focused almost entirely on managing private middle-market credit and its operations are entirely US-focused. While the company is seeking to expand its distribution channels, distribution has historically been limited with a high degree of concentration in the independent broker-dealer channel. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS: Moody's said factors that could lead to a downgrade include: 1) Debt/EBITDA sustained over 3.5x ; 2) pre-tax income margins below 35% on a consistent basis; 3) a material decline in the management fee rate; and/or 4) implementation of fiduciary regulations that could curtail demand for the company's higher-fee products. The negative outlook indicates that a ratings upgrade is unlikely over the next 12-18 months. However, Moody's said factors that could lead to an upgrade include: 1) Debt/EBITDA in the low 2x range on a consistent basis (below 3.5x for a stable outlook); 2) strengthening of the core franchise through greater geographic, product, and distribution diversification; 3) scale as measured by revenues net of distribution and sub-advisory expense beyond $750 million; and/or 4) seasoning of new investment management partnerships and related track record. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact of the breadth and severity of the shock on FSH, and the deterioration in credit quality it has triggered. Founded in 2007, FSH has developed a niche alternative investment offering and distribution capacity focused on private debt and liquid credit strategies for individual investors. As the largest manager of business development company (BDC) assets, FS/KKR Advisor, LLC serves as the investment adviser to two BDCs with approximately $17 billion in assets under management as of December 30, 2019. As of December 30, 2019, FSH had approximately $23 billion in AUM. FREEDOM TRUCKING: Seeks Court Approval to Hire Bankruptcy Attorney ------------------------------------------------------------------ Freedom Trucking, LLC, seeks approval from the U.S. Bankruptcy Court for the Southern District of Indiana to hire an attorney to handle its Chapter 11 case. Freedom Trucking proposes to employ Robert Cheesebourough, Esq., an attorney based in Whitestown, Ind., to provide these services: (a) advise Debtor of its powers and duties in the management of its property; (b) take necessary actions to avoid the attachment of any lien against Debtor's property threatened by secured creditors holding liens; (c) prepare legal papers; and (d) provide other legal services, including the preparation of orders for the sale or release of Debtor's equipment and orders for the borrowing of funds. Prior to its bankruptcy filing, Debtor paid the attorney an initial retainer in the sum of $6,000. Mr. Cheesebourough does not represent any interest adverse to Debtor and its bankruptcy estate, according to court filings. Mr. Cheesebourough can be reached through: Robert D. Cheesebourough, Esq. 5410 Tanglewood Lane Whitestown, IN 46075 Phone: 317-374-4567 Email: robertcheesebourough@gmail.com About Freedom Trucking Freedom Trucking, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ind. Case No. 20-02200) on April 10, 2020. At the time of the filing, Debtor disclosed assets of between $100,001 and $500,000 and liabilities of the same range. Robert D. Cheesebourough, Esq., is the Debtor's legal counsel. FXI HOLDINGS: Moody's Cuts CFR to 'B3', Outlook Negative -------------------------------------------------------- Moody's Investors Service downgraded the ratings of FXI Holdings, Inc. The company's Corporate Family Rating was lowered to B3 from B2, and its Probability of Default Rating was lowered to B3-PD from B2-PD. FXI's $525 million 7.875% senior secured notes due 2024 were also downgraded to B3 from B2. The company's $775 million 12.25% senior secured notes due 2026 were affirmed at B3. The rating actions conclude the review for downgrade initiated on March 6, 2019 in connection with the company's proposed acquisition of Comfort Holding, LLC for approximately $850 million in a largely debt-financed transaction. The rating outlook is negative. At the same time, Moody's withdrew all of the rating of Comfort Holding, LLC because the company's rated debt was redeemed in full in connection with the acquisition by FXI. The downgrade reflects the increase in leverage as a result of FXI's debt-financed merger with Innocor along with demand disruptions from the coronavirus outbreak that will make it difficult for the company to reduce its leverage below the previous debt/EBITDA downgrade trigger of 5.5x within the next year. One of the key review items was FXI's plan to reduce leverage following the acquisition that Moody's estimates is roughly 6.0x pro forma for the transaction as of year-end 2019 and incorporating Moody's adjustments. Despite what Moody's expects will be considerable efforts by the company to aggressively manage its expense structure -- the company has already shut down several manufacturing facilities -- job losses as a result of the coronavirus outbreak will lead to material cutbacks in business and consumer spending, which Moody's expects will weaken FXI's operating performance. Moody's expects that the company's EBITDA will experience a double-digit decline and that debt/EBITDA will remain above 8.0x over the next six to twelve months. The increase in leverage and challenging economic environment outweigh the operating benefits of the combination including increased scale, a stronger market position in bedding and furniture foam supplies, and opportunity for meaningful synergies. Moody's took the following rating actions Issuer: FXI Holdings, Inc.: Ratings downgraded Corporate Family Rating, to B3 from B2 Probability of Default Rating, to B3-PD from B2-PD $525 million 7.875% senior secured notes due 2024, to B3 (LGD4) from B2 (LGD4) Ratings affirmed: $775 million 12.25% senior secured notes due 2026, at B3 (LGD4) Outlook, Changed To Negative From Rating Under Review Issuer: Comfort Holding, LLC's ratings withdrawn: Corporate Family Rating -- previously Caa1 Probability of Default Rating -- previously Caa1-PD $450 million 1st lien term loan due 2024 -- previously Caa1 (LGD4) $100 million 2nd lien term loan due 2025 -- previously Caa3 (LGD6) Outlook, Changed To RWR From Rating Under Review RATINGS RATIONALE FXI's B3 CFR is supported by its improved scale, strong market position in the U.S. foam manufacturing industry and good end market diversity through its automotive, bedding & furniture and medical segments. FXI partially mitigates earnings volatility associated with chemical prices with its 'pass-through' contracts. Ratings are constrained by high leverage, cyclical demand of its automotive, bedding and furniture end markets, and governance risk related to aggressive financial strategies expected under private equity ownership. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The durables sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in FXI's credit profile have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and FXI remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on FXI of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. FXI's good liquidity is supported by $152 million of unrestricted cash as of December 31, 2019 and access to a $235 million asset-based loan facility that expires in November 2025 and was put in place at the end of February in connection with the Innocor acquisition closing. The company drew $150 million on the revolver to increase its cash balance, given current uncertainties and potential volatility in financial markets. There are no maturities until the 7.875% notes come due in November 2024. The negative outlook reflects the uncertain duration of retail store closures and magnitude of any recovery in revenue once stores reopen because of the drag on consumer spending from higher unemployment. These factors could weaken earnings and liquidity. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade is unlikely in the current economic environment. However, the ratings could be upgraded if the company organically grows revenue with a stable to higher margin, generates comfortably positive free cash flow, demonstrates a more conservative financial policy, and sustains debt to EBITDA below 5.5x. The ratings could be downgraded if the company's operating performance deteriorates more than expected, liquidity weakens, free cash flow is weak or negative, or the company completes debt-funded acquisitions or shareholder distributions. FXI is a North American comfort technologies provider serving multiple end-markets at scale. End-markets and applications include bedding, furniture, comfort and acoustic applications in automotive, surgical applicators, and filtration and industrial acoustic management. Pro forma for the company's recent merger with Innocor, annual revenues are about $1.5 billion. GENUINE FINANCIAL: Bank Debt Trades at 18% Discount --------------------------------------------------- Participations in a syndicated loan under which Genuine Financial Holdings LLC is a borrower were trading in the secondary market around 82 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD835 million term loan is scheduled to mature on July 12, 2025. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. GINN-LA QUAIL: Bank Debt Trades at 97.8% Discount ------------------------------------------------- Participations in a syndicated loan under which Ginn-LA Quail West Ltd LLLP is a borrower were trading in the secondary market around 2.19 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD360 million term loan matured on June 8, 2011. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. The Company and certain related entities filed for Chapter 7 bankruptcy protection in 2008 after defaulting on its loan obligations. GO WIRELESS: Moody's Puts B2 CFR on Review for Downgrade -------------------------------------------------------- Moody's Investors Service placed all ratings of Go Wireless Holdings, Inc., including the B2 corporate family rating, under review for downgrade. The outlook was changed to ratings under review from stable. "While Go Wireless is considered an 'essential' retailer, and the vast majority of its stores remain open, Moody's is concerned with the impact on traffic, sales, and liquidity of the stay-in-place regulations implemented by many localities in response to the coronavirus, which is the primary driver of the review for downgrade," stated Moody's Vice President Charlie O'Shea. "Moody's expects a rebound for both traffic and sales to occur once the 'opening up' occurs, however there is risk that Go Wireless' credit metrics could experience meaningful erosion depending on the length of the stay-at-home provisions, as well as the speed with which a potential rebound occurs." On Review for Downgrade: Issuer: Go Wireless Holdings, Inc. Probability of Default Rating, Placed on Review for Downgrade, currently B2-PD Corporate Family Rating, Placed on Review for Downgrade, currently B2 Senior Secured Bank Credit Facility, Placed on Review for Downgrade, currently B2 (LGD3) Outlook Actions: Issuer: Go Wireless Holdings, Inc. Outlook, Changed To Rating Under Review From Stable RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The retail sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Go Wireless's credit profile, including its exposure to a potential decline in customer traffic have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Go Wireless remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Go Wireless of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Go Wireless' ratings are constrained by the potential negative impact on revenues and store traffic from the counter-measures to the coronavirus, the lengthened customer replacement/upgrade cycle, which has resulted in a reduction in upgrades and pressured phone and tablet sales, as contract counts have declined. Moody's expects these pressures to result in leverage, as measured by Debt/EBITDA, to increase from its current level of over 5 times on a trailing twelve-month basis as of 9/30/2019. While leverage is likely to remain elevated, the company continues to evaluate closing underperforming stores as well as realize the benefits from restructuring its sales organization to reduce expenses and commissions paid to improve profitability. The ratings also consider the company's reliance on cellphone manufacturers for continued product innovation and the risk of volatile customer demand related to new product malfunctions or changing consumer preferences. Go Wireless benefits from its solid competitive position as a leading independent retailer of Verizon wireless products, as well as a provider of services and accessories for mobile electronic devices. While liquidity is adequate, lower earnings and reduced cash balances are a constraint given the high level or amortization on the company's term loan. The rating also recognizes Go Wireless' favorable qualitative profile that benefits from the nondiscretionary nature of cell phones as well as its diverse sources of revenue, including insurance and warranty offerings and accessories. The rating also considers Go Wireless' mutually beneficial relationships with Verizon and cellphone manufacturers, which is a competitive advantage over smaller operators. The review for downgrade reflects Moody's concerns that the impact on liquidity and credit metrics of the containment efforts surrounding the coronavirus, specifically the stay-at-home provisions, will result in meaningful deterioration. The review for downgrade will evaluate Go Wireless' ability to support its near-term cash flow deficits and its overall liquidity. The review also considers the company's fourth quarter of fiscal 2019 earnings and whether progress towards earnings stabilization is evident. The review for downgrade will also evaluate the impact of reduced consumer demand on operating performance and credit metrics. Ratings could be upgraded if Go Wireless maintains a conservative financial policy towards shareholder returns and future acquisitions, with improving operating performance such that debt/EBITDA was maintained below 4.75x and EBITA/interest was sustained above 1.5x and the company maintains good liquidity. Ratings could be downgraded if any factors cause debt/EBITDA to approach 6.0x and EBITA/interest to approach 1.0x or if liquidity were to weaken. Go Wireless, headquartered in Las Vegas, NV, is a leading independent retailer of Verizon wireless products, in addition to accessories and services for mobile devices. The company operates over 715 stores in 32 states. Revenue for the last twelve-month period ended September 30, 2019 was approximately $1 billion. Go Wireless is wholly owned by company management. GOLD STANDARD: Bank Debt Trades at 64% Discount ----------------------------------------------- Participations in a syndicated loan under which Gold Standard Baking Inc is a borrower were trading in the secondary market around 36 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD109 million term loan is scheduled to mature on April 24, 2021. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. GRABIT INC: Court Confirms Reorganization Plan ---------------------------------------------- The Bankruptcy Court entered findings of fact, conclusions of law, and order (i) approving Disclosure Statement and (ii) confirming Chapter 11 Plan of Reorganization of Grabit, Inc., on March 26, 2020. As evidenced by the Voting Certification, creditors and interest holders in Classes 1, 5, 6 and 7 voted to accept the Plan. Creditors in Classes 2 (Other Priority Claims), 3 (Other Secured Claims) and 4 (General Unsecured Claims) are Unimpaired and deemed to accept the Plan, and therefore, are not entitled to vote to accept or reject the Plan. Creditors in Class 8 (Unexercised Option) will not receive or retain any property under the Plan on account of the Unexercised Options and are conclusively presumed to have rejected the Plan, and therefore, are not entitled to vote to accept or reject the Plan. Holders of claims in Classes 2, 3 and 4 are deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Holders of Class 8 (Unexercised Options) are deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code. The Plan, therefore, does not satisfy Section 1129(a)(8) of the Bankruptcy Code. Notwithstanding the lack of compliance with Section 1129(a)(8) of the Bankruptcy Code with respect to Class 8, the Plan is confirmable because it satisfies Section 1129(b)(1) of the Bankruptcy Code. The Plan may be confirmed notwithstanding the fact that Class 8 (Unexercised Options) is impaired under the Plan and is deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code. Unlike the Holders of Interests in Class 7, who hold non-contingent Interests, the holders of Class 8 Unexercised Options have contingent rights to Interests that would require the payment of funds to the Debtor to obtain an Interest in Class 7. Because Class 8 Claims are contingent, and the Holders of such Claims did not choose to exercise their option rights, it is fair and equitable to treat the holders of Class 8 in a different manner than non-contingent Interest Holders in Class 7. As such, the Plan complies with section 1129(b) by satisfying the requirements of section 1129(b)(1) and 1129(b)(2) of the Bankruptcy Code. To resolve an informal comment provided by Nike to the Plan, Section 5.4 of the Plan (entitled Pass Through) is replaced with the following (with the modifications to the language contained in the Plan shown in bold): Any rights or arrangements necessary or useful to the operation of the Debtor's business but not otherwise addressed as a Claim or Interest under this Plan, including non-exclusive or exclusive patent, trademark, copyright, maskwork or other intellectual property licenses, bonding arrangements, operating licenses with any applicable regulatory authority, and other executory contracts not assumable under section 365(c) of the Bankruptcy Code, will, in the absence of any other treatment under the Plan or Confirmation Order, be passed through the Chapter 11 Case for the benefit of the Reorganized Debtor and the counterparty or counterparties to such rights or arrangements. The legal, equitable and contractual rights of the Debtor and Reorganized Debtor under such rights or arrangements shall be left unaltered and unaffected by the Chapter 11 Case, the Plan and the Confirmation Order. To the extent that any entity is a counterparty to such rights or arrangements, the legal, equitable and contractual rights of such entity that are not a Claim or Interest under the Plan shall be left unaltered and unaffected by the Chapter 11 Case, the Plan and this Confirmation Order. A full-text copy of the Findings of Fact, Conclusions of Law, and Order dated April 1, 2020, is available at https://tinyurl.com/v2vbl3r from PacerMonitor.com at no charge. About Grabit(TM) Inc. Grabit(TM) -- https://grabitinc.com/ -- is a robotic and machine learning company leveraging proprietary electro-adhesion technology to revolutionize consumer and industrial products manufacturing and warehouse logistics. Grabit's current investors include Formation 8, Draper Nexus, Danhua Capital, Nike, Samsung, Brother Industries, ABB, Shanghai Electric, Flex, NTT Docomo and the Esquel Group. Grabit, Inc., sought Chapter 11 protection (Bankr. D. Del. Case No. 19-12703) on Dec. 18, 2019. The Debtor was estimated to have $100,000 to $500,000 in assets and $10 million to $50 million as of the bankruptcy filing. COLE SCHOTZ P.C., led by G. David Dean, Esq., is the Debtor's counsel. GROUP 1 AUTOMOTIVE: Moody's Alters Outlook on Ba1 CFR to Negative ----------------------------------------------------------------- Moody's Investors Service Inc. affirmed all ratings of Group 1 Automotive, Inc. including the Ba1 corporate family rating. The outlook was changed to negative from stable. The SGL-2 speculative grade liquidity rating is maintained. "The outlook change to negative reflects the potential stress to Group 1's credit metrics, which at FYE 2019 were already testing downward rating triggers, due to the effects on all aspects of its business model of the coronavirus," stated Moody's Vice President Charlie O'Shea. "The affirmation of the Ba1 rating recognizes the flexibility in Group 1's business model, which is already being demonstrated by significant cost reductions in reaction to the loss of volume due to the coronavirus, and which Moody's expects will alleviate some, but potentially not all, of the negative pressure on credit metrics," continued O'Shea. Affirmations: Issuer: Group 1 Automotive, Inc. Probability of Default Rating, Affirmed Ba1-PD Corporate Family Rating, Affirmed Ba1 Senior Unsecured Regular Bond/Debenture, Affirmed Ba2 (LGD5) Outlook Actions: Issuer: Group 1 Automotive, Inc. Outlook, Changed to Negative from Stable RATINGS RATIONALE Group 1's Ba1 rating considers its flexible operating model, with relatively unpredictable new car profitability exceeded by the more predictable parts and service and growing used car segments, its brand mix, which is weighted to the historically more stable imports, and its geographic diversity, with presence in the UK and Brazil, with used businesses in those markets driving profitability. The negative outlook reflects concern that the impact of coronavirus may stress Group 1's credit metrics which at FYE 2019 were already approaching, and in the case of interest coverage, slightly breaching the downgrade triggers. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The new auto sales are one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, Moody's believes Group 1's new vehicle sales are vulnerable to shifts in market sentiment in these unprecedented operating conditions and Group 1's level of new vehicle sales remain vulnerable to the outbreak's continuing spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if operating performance improved and financial strategy remained conservative such that debt/EBITDA was maintained around 3.5 times and EBIT/Interest was sustained above 5 times, with liquidity remaining at least good. Ratings could be downgraded if negative trends in operating performance or financial strategy decisions resulted in debt/EBITDA rising above 4.75 times or EBIT/Interest falling below 4 times, or if liquidity were to weaken. The principal methodology used in these ratings was Retail Industry published in May 2018. Headquartered in Houston, Texas, Group 1 Automotive is a leading retailer and servicer of new and used vehicles, with operations in the UK and Brazil as well as a significant presence in the US. Annual revenues are around $11 billion. GULF FINANCE: Bank Debt Trades at 47% Discount ---------------------------------------------- Participations in a syndicated loan under which Gulf Finance LLC is a borrower were trading in the secondary market around 53 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The US$1.150 billion term loan is scheduled to mature on August 25, 2023. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. HALO BUYER: Bank Debt Trades at 17% Discount -------------------------------------------- Participations in a syndicated loan under which Halo Buyer Inc is a borrower were trading in the secondary market around 83 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The US$260 million term loan is scheduled to mature on June 28, 2025. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. HANJIN INTERNATIONAL: S&P Cuts ICR to CCC+ on Worsening Liquidity ----------------------------------------------------------------- S&P Global Ratings lowered its long-term issuer credit rating on Hanjin International Corp. (HIC) to 'CCC+' from 'B-' and the issue rating on the company's senior secured term loan ('1' recovery rating) to 'B' from 'B+'. The ratings remain on CreditWatch with negative implications. HIC faces significant debt maturities in the next six months. All of the company's debt of US$897 million will mature in September and October 2020. Yet, U.S. dollar funding channels for sub-investment grade companies are almost frozen and borrowing costs are rapidly increasing. S&P still believes HIC's Wilshire Grand Center (WGC) property in downtown Los Angeles has good asset quality and a competitive location relative to other assets in the area. However, the company will likely face worse funding conditions than during its refinancing in 2017, considering its high leverage and weak cash flow. HIC does not have a clear refinancing plan in place at this time. The COVID-19 pandemic is likely to substantially weaken the company's hotel operations and cash flows in 2020. "We expect the ramp-up of HIC's hotel business in Los Angeles--opened in late 2017--to be further delayed due to the global coronavirus outbreak. Travel restrictions have brought the travel industry to a virtual standstill and are severely hurting the lodging industry globally. The duration of the pandemic and the severity of the ensuing economic and industry downturn remain uncertain. However, considering the likely negative economic impact, the travel downturn could persist beyond the second quarter, in our view. Our base case assumes that HIC's hotel business gradually recovers toward the end of 2020 as the pandemic is brought under control," S&P said. "We expect HIC to have significant discretionary cash flow deficits over the next two to three years. We forecast the company's EBITDA to be negative US$10 million-US$20 million in 2020, due to substantially weaker occupancy and room rates during the year." HIC's EBITDA should modestly recover to US$10 million-US$20 million in 2021 and US$20 million-US$30 million from 2022 as operations normalize and ramp up again. Still, this level of earnings will not be sufficient to cover the company's annual financing cost of US$50 million-US$80 million over the next two to three years, which remains dependent on refinancing conditions. The company's current financing cost is US$40 million-US$50 million," S&P said. HIC continues to benefit from ongoing support from its parent, KAL, which provides some buffer against a sudden default. "We do not expect the tough operating environment to change the relationship between HIC and KAL. KAL is in discussion with Korea's policy banks and other lenders about HIC's refinancing plan. In 2017, HIC refinanced its debt through a US$600 million first-lien term loan B guaranteed by KAL and a US$300 million secured bond guaranteed by the Export-Import Bank of Korea and KAL. Of note, HIC's debt is also secured by the WGC property, which was valued at about US$1.1 billion as of January 2020. We currently apply a two-notch uplift to the rating on its first-lien secured term loan B, above the 'CCC+' rating on HIC, based on our expectation of very high recovery," S&P said. "However, we also see growing uncertainty over KAL's ability to provide timely support to HIC. Currently, 80%-90% of KAL's global passenger routes, accounting for 60%-70% of total revenue, are suspended. We expect KAL to incur significant operating losses in 2020, though the airline's cargo business, comprising 20%-30% of total revenue, remains strong due to global supply shortage. In our view, KAL's weak earnings and fixed cash costs (interest payments, aircraft lease payments, and some labor costs) will worsen its liquidity position over the next two to three months," the rating agency said. In addition, KAL has a large short-term debt of over Korean won (KRW) 5.0 trillion, including HIC's maturing debt and lease liability, exposing it to volatile funding conditions. That said, KAL has good relationships with Korea's policy banks, as evident from the global bond issuances guaranteed by the banks and bank loans provided. Environmental, social, and governance (ESG) factors relevant to the rating action: -- Health and safety HANNON ARMSTRONG: Fitch Corrects April 15 Ratings Release --------------------------------------------------------- Fitch Ratings replaced a ratings release on subsidiaries of Hannon Armstrong Sustainable Infrastructure Capital published on April 15, 2020 to correct the name of the obligor for the bonds. The amended ratings release is as follows: Fitch Ratings has assigned a rating of 'BB+(EXP)' to the $350 million of five-year unsecured notes issued jointly by HAT Holdings I LLC and HAT Holdings II LLC, which are the indirect subsidiaries of Hannon Armstrong Sustainable Infrastructure Capital (HASI; Long-Term Issuer Default Rating BB+/Stable). The notes will be guaranteed by HASI. Proceeds from the proposed issuance are expected to be used to repay a portion of secured debt outstanding on the credit facility and for general corporate purposes. KEY RATING DRIVERS The rating on the unsecured notes is expected to be equalized with HASI's Long-Term IDR as it ranks equally with the outstanding unsecured notes. The rating also reflects the availability of an unencumbered asset pool, which suggests average recovery prospects for debtholders under a stressed scenario. Pro forma for the $350 million offering, Fitch estimates that unsecured debt (at par) would increase to approximately 59% of total debt outstanding; up from 47% at Dec. 31 2019 (YE19). Fitch views the increase favorably, as it enhances the firm's funding flexibility, and expects the firm continue to be opportunistic with regard to future unsecured issuance. HASI had $31 million of borrowings outstanding on its secured revolving credit facility at YE19 and no term debt maturities until Sept. 1, 2022 when $150 million of convertible notes come due. The impact of the proposed debt issuance on HASI's leverage ratio is expected to be minimal, as the firm continued to access the equity markets in 1Q20 via its at-the-market (ATM) program. HASI's leverage was 1.51x at YE19, and would be expected to increase to 1.57x, pro forma for the issuance, after accounting for $150 million of equity raised in the ATM program in 1Q20 and assuming $31 million of revolver borrowings are repaid with debt proceeds. Leverage is expected to remain below the firm's leverage target of up to 2.5x. While HASI does not have a defined leverage limit by asset class, consolidated leverage factors in the portfolio mix and an assessment of the credit, liquidity, and price volatility of each investment. Fitch believes HASI's leverage target is appropriate for the portfolio risk and ratings and expects HASI to maintain appropriate headroom to the target to account for potential increases in mezzanine debt or common equity securities. The global spread of the coronavirus and the implementation of strict social distancing guidelines across the U.S. are expected to push the economy toward a recession. While Fitch believes HASI is relatively well positioned, it is expected to experience some deterioration in credit and operating performance, given direct exposure to consumers in residential solar projects, exposures to non-government entities in energy efficiency projects, exposure to variability in commodity prices, and due to expected delays in certain construction projects. A spike in non-accrual levels or write-down in equity investments and/or material deterioration in operating performance could lead to negative rating action, particularly if it leads to a meaningful increase in leverage. HASI's rating remains supported by its established, albeit niche, market position within the renewable energy financing sector, experienced management team, diversified investment portfolio, strong credit track record and a fairly conservative underwriting culture. They also reflect its adherence to leverage targets that are commensurate with the risk profile of the portfolio, demonstrated access to public equity markets, and long-term relationships with its customers. Rating constraints include modest scale, dependence on access to the capital markets to fund portfolio growth and a limited ability to retain capital due to dividend distribution requirements as a REIT. Additionally, HASI's planned opportunistic shift in the company's portfolio mix toward higher-risk mezzanine debt and common equity exposures is viewed with caution by Fitch. The Stable Outlook reflects Fitch's expectation for broadly consistent operating performance, the continuation of strong asset quality trends, the management of leverage in a manner that is consistent with the risk profile of the portfolio and an improvement in the funding profile with the opportunistic issuance of additional unsecured debt. RATING SENSITIVITIES The unsecured debt rating is linked to the Long-Term IDR and would be expected to move in tandem. However, a meaningful decline in the amount of unsecured debt in the capital structure, in favor of secured borrowings, and/or a meaningful decline in unencumbered assets could result in the unsecured debt rating being notched down from the IDR. Factors that could, individually or collectively, lead to positive rating action include the ability to demonstrate franchise resilience in an increasingly competitive environment and through the impending economic recession, the maintenance of fairly low leverage that is consistent with the risk profile of the portfolio, enhanced liquidity, and further improvement in funding flexibility. An upgrade would also be contingent on the maintenance of strong credit performance on the portfolio as a whole and consistent core operating performance. Factors that could, individually or collectively, lead to negative rating action include a sustained increase in leverage above 2.5x and/or a material shift in HASI's risk profile, including a material increase in mezzanine debt and/or equity investments without a commensurate decline in leverage. A spike in non-accrual levels or write-down in equity investments, material deterioration in operating performance, weaker funding flexibility, including a decline in the proportion of unsecured funding, and/or weaker core earnings coverage of dividends would also be negative for ratings. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of 3 - ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. HASI has an ESG Relevance Score of 4(+) for Exposure to Social Impact. The score has a positive impact on the ratings as the shift in consumer preferences toward renewable energy will benefit the company's business model and its earnings and profitability, which is relevant to the rating in conjunction with other factors. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Financial Institutions issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS HAT Holdings I LLC and HAT Holdings II LLC are the indirect subsidiaries of Hannon Armstrong Sustainable Infrastructure Capital (HASI; Long-Term IDR BB+/Stable). HENLEY PROPERTIES: $400K Sale of Winslow Property Approved ---------------------------------------------------------- Judge Brian T. Fenimore of the U.S. Bankruptcy Court for the Western District of Missouri authorized Henley Properties, LLC's sale of the approximately 300 acres located at Old Cabin Road, Winslow, Arkansas, Washington County parcels 575-03651-000, 575-03626-000, 575-03624-000, and 001-01067-000, to Northwest Arkansas Land Trust for $400,000. The sale is free and clear liens. The sale is in accordance with the terms of the Chapter 11 Plan confirmed Feb. 28, 2020. The Order a final order and enforceable upon entry. The 14-day stay of the Order under Rule 6004(h) of the Federal Rules of Bankruptcy Procedure does not apply to the Order. About Henley Properties Henley Properties, LLC, owns and operates weddings and events venue. Henley Properties sought Chapter 11 protection (Bankr. W.D. Mo. Case No. 19-30422) on Aug. 6, 2019. In the petition signed by Floyd W. Henley and Rebecca L. Henley, members, the Debtor disclosed total assets at $2,973,329 and $1,192,562 in debt. The case is assigned to Judge Brian T. Fenimore. The Debtor tapped Mariann Morgan, Esq., at Checkett & Pauly, as counsel. HOLOGENIX LLC: Case Summary & 16 Unsecured Creditors ---------------------------------------------------- Debtor: Hologenix, LLC 17383 Sunset Blvd., Suite A420 Pacific Palisades, CA 90272 Business Description: Hologenix, LLC is the inventor of Celliant technology (https://celliant.com), a patented, clinically-tested textile technology that harnesses and recycles the body's natural energy. Use of products containing this technology has been shown to improve athletic performance and recovery, sleep quality and general health and wellness. Chapter 11 Petition Date: April 22, 2020 Court: United States Bankruptcy Court Central District of California Case No.: 20-13849 Judge: Hon. Barry Russell Debtor's Counsel: John-Patrick M. Fritz, Esq. LEVENE, NEALE, BENDER, YOO & BRILL L.L.P. 10250 Constellation Blvd., Suite 1700 Los Angeles, CA 90067 Tel: (310) 229-1234 E-mail: jpf@lnbyb.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Seth Casden, CEO. A copy of the petition containing, among other items, a list of the Debtor's 16 unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/1X2KVf HOYA MIDCO: S&P Lowers ICR to B-; Ratings Remain on Watch Negative ------------------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating on U.S.-based Hoya Midco LLC (doing business as Vivid Seats) to 'B-' from 'B' and its issue-level rating on the senior secured credit facility to 'B-' from 'B'. All its ratings remain on CreditWatch with negative implications. "We expect Vivid Seats to generate minimal revenue and substantially negative cash flows during the coronavirus outbreak as a result of cancelled and postponed live events. The majority of live music, sporting, and theater events over the next few months have been either canceled or postponed in response to the coronavirus outbreak. As a result, the GTV sold on Vivid Seats' platform has declined dramatically, and we expect sales to remain minimal until the coronavirus outbreak is over and public events resume, which might be in the third quarter of 2020 at the earliest. In total, we believe revenues could decline at least 25%-35% in 2020," S&P said. The CreditWatch placement reflects the company's direct exposure to live events (sports, music, theater, etc.) that are currently being postponed or canceled due to the COVID-19 pandemic. In resolving the CreditWatch, S&P will continue to monitor the severity and duration of COVID-19's impact on the business as well as the company's ability to adequately manage its costs structure, cash flow, and liquidity such that it can comfortably meet its debt commitments. "We could lower the rating if we believed that the company would not be able to successfully manage its liquidity in light of COVID-19's adverse impacts on the live events industry. This could occur if we expected a payment default on its debt obligations or if the company were unable to attain an amendment or waiver to its credit agreement to avoid a covenant violation. We could also lower the rating if we viewed the capital structure as unsustainable due to a materially slower return of live events such that cash flow generation were minimal longer term," S&P said. "We could affirm the 'B-' rating if we believed the company were able to manage its operating performance such that it generated positive FOCF and maintained adequate liquidity to comfortably service its fixed charges," S&P said. HUNT OIL: Moody's Withdraws B3 Issuer Rating on Data Inadequacy --------------------------------------------------------------- Moody's Investors Service withdrew Hunt Oil Company's B3 issuer rating and negative outlook. RATINGS RATIONALE Hunt Oil Company is a private company and has ceased participation in the rating process. Moody's has decided to withdraw the ratings because it believes it has insufficient or otherwise inadequate information to support the maintenance of the ratings. Hunt Oil Company is a privately owned independent exploration and production company headquartered in Dallas, Texas. It is a wholly owned subsidiary of Hunt Consolidated, Inc. IMAGINE! PRINT: $385MM Bank Debt Trades at 79% Discount ------------------------------------------------------- Participations in a syndicated loan under which Imagine! Print Solutions Inc is a borrower were trading in the secondary market around 21 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD385 million term loan is scheduled to mature on June 21, 2022. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. INNOVATIVE WATER: $100M Bank Debt Trades at 44% Discount -------------------------------------------------------- Participations in a syndicated loan under which Innovative Water Care Global Corp is a borrower were trading in the secondary market around 56 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The US$100 million term loan is scheduled to mature on March 1, 2027. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. INNOVATIVE WATER: $360M Bank Debt Trades at 48% Discount -------------------------------------------------------- Participations in a syndicated loan under which Innovative Water Care Global Corp is a borrower were trading in the secondary market around 52 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The US$360 million term loan is scheduled to mature on March 1, 2026. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. INPIXON: Raises $1.89 Million Through Common Stock Offering ----------------------------------------------------------- Pursuant to the terms and conditions of that certain Equity Distribution Agreement, dated as of March 3, 2020, by and between Inpixon and Maxim Group LLC, since the Company's last update on April 13, 2020, the Company has sold 1,662,191 shares of Common Stock at a weighted average price per share of $1.1349. These sales resulted in gross proceeds to the Company of $1,886,420. The Company will pay Maxim compensation of $75,456, based on a rate of 4.0% of the gross sales, for net proceeds to the Company equal to $1,810,963. Those sales were made pursuant to the Company's effective shelf registration statement on Form S-3 (File No. 333-223960), which was filed with the Securities and Exchange Commission on March 27, 2018, as amended on May 15, 2018, and declared effective on June 5, 2018, and a base prospectus dated as of June 5, 2018 included in the Registration Statement and the prospectus supplement relating to the offering filed with the SEC on March 3, 2020. Exchange Agreements Since April 13, 2020, the Company has entered into agreements to issue an aggregate of 975,000 shares of Common Stock to the holder of that certain outstanding promissory note issued on Aug. 8, 2019, at a weighted average price per share equal to $1.11, which was equal to the Minimum Price as defined in Nasdaq Listing Rule 5635(d) in each case. Pursuant to such exchange agreements, the Company and the noteholder agreed to (i) partition new promissory notes in the form of the Original Note in the aggregate original principal amount equal to $1,080,000 and then cause the outstanding balance of the Original Note to be reduced by the same amount; and (ii) exchange the partitioned notes for the delivery of the Exchange Shares. About Inpixon Headquartered in Palo Alto, California, Inpixon (Nasdaq: INPX) is an indoor intelligence company that specializes in capturing, interpreting and giving context to indoor data so it can be translated into actionable intelligence. The company's indoor location and data platform ingests diverse data from IoT, third-party and proprietary sensors designed to detect and position all active cellular, Wi-Fi, UWB and Bluetooth devices, and uses a proprietary process that ensures anonymity. Paired with a high-performance data analytics engine, patented algorithms, and advanced mapping technology, Inpixon's solutions are leveraged by a multitude of industries to do good with indoor data. This multidisciplinary depiction of indoor data enables users to increase revenue, decrease costs, and enhance safety. Inpixon customers can boldly take advantage of location awareness, analytics, sensor fusion and the Internet of Things (IoT) to uncover the untold stories of the indoors. Inpixon reported a net loss of $33.98 million for the year ended Dec. 31, 2019, compared to a net loss of $24.56 million for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $21.22 million in total assets, $15.17 million in total liabilities, and $6.05 million in total stockholders' equity. Marcum LLP, in New York, NY, the Company's auditor since 2012, issued a "going concern" qualification in its report dated March 3, 2020, citing that the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. INSTALLED BUILDING: Moody's Alters Outlook on B1 CFR to Stable -------------------------------------------------------------- Moody's Investors Service affirmed Installed Building Products Inc.'s B1 Corporate Family Rating and the B1-PD Probability of Default Rating. Moody's also affirmed the Ba3 rating on the company's senior secured term loan maturing 2025 and the B3 rating on its senior unsecured notes due 2028. The SGL-1 Speculative Grade Liquidity Rating is maintained. The outlook is changed to stable from positive. The change in outlook to stable from positive reflects Moody's expectation that IBP's revenue and earnings will contract over the next twelve months. New residential construction, the primary driver of IBP's revenue, is under pressure as the coronavirus and related economic concerns will weaken homebuyer sentiment. Moody's has a negative outlook for the US homebuilding sector. The following ratings/assessments are affected by its actions: Affirmations: Issuer: Installed Building Products Inc. Probability of Default Rating, Affirmed B1-PD Corporate Family Rating, Affirmed B1 Senior Secured Bank Credit Facility, Affirmed Ba3 (LGD3) Senior Unsecured Regular Bond/Debenture, Affirmed B3 (LGD5) Outlook Actions: Issuer: Installed Building Products Inc. Outlook, Changed To Stable From Positive RATINGS RATIONALE IBP's B1 CFR reflects Moody's expectations that the company will maintain its very good liquidity profile over the next twelve months. Also, Moody's projects solid credit metrics, such as debt-to-LTM EBITDA of 4.1 at year-end 2020 despite a scenario in which the company experiences significant revenue decline of 20% on a year-over-year basis and some contraction in operating margin to about 7.6%. The rapid and widening spread of the coronavirus outbreak and the resulting economic contraction are creating a severe and extensive credit shock across the homebuilding sector. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Governance risk Moody's considers in IBP's credit profile is a moderate financial strategy, evidenced by improving leverage, no significant share repurchases and no dividends at this time. The company has eight directors on its board. Five of the board members are independent. This level of board experience, independence and oversight should help minimize governance risks, including excessive leverage and aggressive acquisitions. IBP's SGL-1 Speculative Grade Liquidity Rating reflects Moody's view that the company will maintain a very good liquidity profile over the next twelve to 18 months, generating free cash flow throughout the period and having abundant revolver availability. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade (All ratios incorporate Moody's standard adjustments) - Debt-to-LTM EBITDA is sustained below 3.0x - Preservation of a very good liquidity profile - Trends in end markets that can support organic growth - Increasing scale and product diversity Factors that could lead to a downgrade (All ratios incorporate Moody's standard adjustments) - Operating margin nearing 5% - Debt-to-LTM EBITDA sustained above 4.0x - The company's liquidity profile deteriorates The principal methodology used in these ratings was Distribution & Supply Chain Services Industry published in June 2018. Installed Building Products Inc., headquartered in Columbus, Ohio, primarily installs insulation and other products for residential and commercial builders throughout the United States. Revenue for the year ended December 31, 2019 was about $1.5 billion. INTERNAP TECHNOLOGY: Taps Moelis & Company as Financial Advisor --------------------------------------------------------------- Internap Technology Solutions, Inc., seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to hire Moelis & Company LLC as its investment banker and financial advisor. Moelis will provide these services in connection with the Chapter 11 cases filed by Internap Technology and its affiliates: i. assist in reviewing and analyzing the results of Debtors' operations, financial condition and business plan; ii. assist in reviewing and analyzing any potential transaction; iii. assist in negotiating any transaction; iv. advise Debtors on the terms of securities that may be issued in any potential capital transaction; v. assist in the preparation of an information memo for a potential sale transaction or, if requested by Debtors, capital transaction; vi. assist Debtors in contacting potential acquirers or purchasers, provide them with the information memo and additional information about Debtors' assets, properties or businesses, subject to customary business confidentiality agreements; and vii. provide other financial advisory and investment banking services in connection with a restructuring, sale transaction or, if requested by Debtors, capital transaction as Moelis and Debtors may mutually agree upon. Moelis will be compensated as follows: i. Monthly Fee. A monthly fee of $150,000. ii. Restructuring Fee. At the closing of a restructuring, a fee of $4 million. Fifty percent (50%) of the aggregate monthly fees paid for April 2020 or thereafter will be credited against the restructuring fee. In addition, if a business transaction fee for the sale of iWeb is paid prior to a restructuring, such business transaction fee will be credited, to the extent previously paid, against the restructuring fee. Only one restructuring fee shall be payable. a. A fee in the event of a company transaction equal to 1.125 percent of transaction value, payable at the closing of such deal. If a restructuring fee is paid prior to a company transaction, $2 million of the restructuring fee will be credited, to the extent previously paid, against the company transaction fee. b. A fee in the event of any business transaction, payable promptly at the closing of any such transaction, equal to (i) 1.1250 percent of "transaction value" in the case of a business transaction involving cloud services or iWeb or (ii) $125,000 in the case of any other business transaction. c. A fee in the event of a bank street transaction, payable promptly at the closing of such transaction, equal to $125,000. iv. Capital Transaction Fee. At the closing of a capital transaction, where Debtors have requested Moelis' assistance, a fee of: a. 3 percent of the aggregate gross amount or face value of capital raised in the capital transaction as equity, equity-linked interests, options, warrants or other rights to acquire equity interests, plus b. 2 percent of the aggregate gross amount of unsecured debt obligations and other interests raised in the capital transaction. c. 1 percent of the aggregate gross amount of secured debt obligations and other interests raised in the capital transaction. Debtors paid the firm an expense advance retainer in the amount of $25,000. Adam Keil, managing director of Moelis, disclosed in court filings that the firm is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. Moelis may be reached through: Adam B. Keil Moelis & Company LLC 399 Park Avenue, 5th Floor New York, NY 10022 Office Phone: (212) 883-3800 Direct Phone: (212) 883-3829 Fax: (212) 880-4260 About Internap Corporation Internap Corporation (NASDAQ: INAP) -- http://www.INAP.com/-- is a leading-edge provider of high-performance data center and cloud solutions with 100 network Points of Presence worldwide. INAP's full-spectrum portfolio of high-density colocation, managed cloud hosting and network solutions supports evolving IT infrastructure requirements for customers ranging from the Fortune 500 to emerging startups. INAP operates in 21 metropolitan markets, primarily in North America, with 14 INAP Data Center Flagships connected by a low-latency, high-capacity fiber network. On March 16, 2020, Internap Technology Solutions Inc. and six affiliates, including INAP Corporation, each filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 20-22393). Judge Robert D. Drain oversees the cases. Debtors tapped Milbank LLP as legal counsel, FTI Consulting as restructuring advisor, and Moelis & Company as financial advisor. Prime Clerk LLC is the claims agent and administrative advisor. IPC CORP: Bank Debt Trades at 42% Discount ------------------------------------------ Participations in a syndicated loan under which IPC Corp is a borrower were trading in the secondary market around 58 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The US$38 million term loan is scheduled to mature on August 6, 2021. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. IQOR US: Bank Debt Trades at 71% Discount ----------------------------------------- Participations in a syndicated loan under which iQor US Inc is a borrower were trading in the secondary market around 29 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD170 million term loan is scheduled to mature on April 1, 2022. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. JAPAN INVESTMENT: Seeks to Hire Eric A. Liepins as Legal Counsel ---------------------------------------------------------------- Japan Investment, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire Eric A. Liepins P.C. as its legal counsel. The firm will advise Debtor of its powers and duties under the Bankruptcy Code and will provide other legal services in connection with its Chapter 11 case. The firm will charge $275 per hour for its services. Liepins received a retainer of $5,000, plus the filing fee. Eric Liepins, Esq., disclosed in court filings that his firm does not represent any interest adverse to Debtor's bankruptcy estate. The firm can be reached through: Eric A. Liepins, Esq. Eric A. Liepins, P.C. 12770 Coit Road, Suite 1100 Dallas, TX 75251 Telephone: (972) 991-5591 Telefax: (972) 991-5788 Email: eric@ealpc.com About Japan Investment Japan Investment, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 20-31085) on April 6, 2020. At the time of the filing, Debtor had estimated assets of between $100,001 and $500,000 and liabilities of between $500,001 and $1 million. Judge Stacey G. Jernigan oversees the case. Eric A. Liepins, P.C. is Debtor's legal counsel. JO-ANN STORES: Bank Debt Trades at 64% Discount ----------------------------------------------- Participations in a syndicated loan under which Jo-Ann Stores LLC is a borrower were trading in the secondary market around 36 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD905 million term loan is scheduled to mature on October 16, 2023. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. K&N PARENT: Bank Debt Trades at 48% Discount -------------------------------------------- Participations in a syndicated loan under which K&N Parent Inc is a borrower were trading in the secondary market around 52 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD100 million term loan is scheduled to mature on October 20, 2024. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. KAISER ALUMINUM: S&P Alters Outlook to Negative, Affirms BB+ ICR ---------------------------------------------------------------- S&P Global Ratings affirmed its 'BB+' rating on Foothill Ranch, Calif.-based specialty aluminum products producer Kaiser Aluminum Corp. and revised the outlook to negative from stable. S&P rates the company's senior unsecured notes 'BB+'. The recovery rating is '4'. "We expect Kaiser's EBITDA to be weaker than we previously forecasted for 2020 and 2021 as a result of the decline in economic activity due to efforts to stem the coronavirus. Kaiser will experience a sharp decline in business activity in 2020 due to its exposure to aerospace, automotive, and general engineering end markets, which are all expected to contract this year as a result of the economic recession brought on by the coronavirus pandemic. We expect this weaker demand to lead to a 15%-20% drop in volumes. Factoring in Kaiser's flexible cost structure, we forecast EBITDA of about $100 million to $150 million, which could extend into 2021 as the timing of a recovery in Kaiser's end markets is uncertain. We expect light vehicle sales to decline about 25% in 2020 to 12.7 million units before rebounding a bit in 2021." This compares to 17 million sales in 2019. The aerospace market may take longer to recover due to air traffic taking 24 months to return to pre-coronavirus levels according to S&P Global Ratings assumptions, coupled with a potential prolonged supply-chain destocking," S&P said. The negative outlook reflects risk that the decline in economic activity across Kaiser's end markets is more severe and prolonged than anticipated, which could result in leverage above 2x. "We could lower our rating on Kaiser, if debt to EBITDA increases above 3x for a sustained period, with negative free cash flow. This could result from downward pressure on Kaiser's end markets persisting into 2021," S&P said. "We could return the outlook to stable if end market demand remains more resilient and if volumes recover, resulting in debt to EBITDA remaining below 2x," the rating agency said. KEN GARFF: Moody's Places Ba2 CFR on Review for Downgrade --------------------------------------------------------- Moody's Investors Service, Inc. placed all ratings of Ken Garff Automotive, LLC on review for downgrade, including the Ba2 corporate family rating. "Its review action reflects Moody's concern that Garff's credit metrics, which are already exhibiting stress with respect to downgrade triggers, particularly interest coverage, which is virtually 'at' the 2 times trigger, will undergo more stress during the coronavirus pandemic," stated Moody's Lead Garff Analyst Charlie O'Shea. "Moody's review will focus on, among other things, the effectiveness of the levers that Garff has already thrown on the cost front to mitigate the effects of the coronavirus on demand and volumes." On Review for Downgrade: Issuer: Ken Garff Automotive, LLC Probability of Default Rating, Placed on Review for Downgrade, currently Ba2-PD Corporate Family Rating, Placed on Review for Downgrade, currently Ba2 Senior Unsecured Regular Bond/Debenture, Placed on Review for Downgrade, currently B1 (LGD5) Outlook Actions: Issuer: Ken Garff Automotive, LLC Outlook, Changed To Rating Under Review From Stable RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Garff's Ba2 rating, which is on review for downgrade, considers its favorable position in its chosen markets, predominantly in its home state of Utah, its brand mix with heavy domestic weighting, its flexible business model, with shifting emphasis towards used vehicles as this segment lags the rated universe, and its stable ownership and management befitting a third-generation company. The review for downgrade will evaluate the impact on Ken Garff's operating performance and credit metrics including its ability to notably reduce variable costs. The review will also consider Ken Garff's liquidity and impact to free cash flow of the coronavirus pandemic. Ratings could be downgraded should operating performance or financial strategy decisions result in debt/EBITDA climbing above 5 times or -- EBIT/interest approaching 2 times or liquidity were to weaken. Ratings could be confirmed should Ken Garff evidence its ability to maintain good liquidity throughout the potential duration of the coronavirus pandemic and ensuing period of weaker consumer demand while also demonstrating that it can improve interest coverage to a level that is more supportive of a Ba2 rating. Given the review for downgrade, an upgrade is currently unlikely. However, over the longer term ratings could be upgraded if operating performance and financial strategy decisions result in debt/EBITDA sustained below 4 times, and EBIT/interest sustained above 3.5 times with liquidity remaining at least good. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The level of new auto sales are one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, Moody's believes Ken Garff's vehicle sales are vulnerable to shifts in market sentiment in these unprecedented operating conditions and Ken Garff's level of vehicle sales remain vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety The principal methodology used in these ratings was Retail Industry published in May 2018. Ken Garff, Inc., headquartered in Salt Lake City, Utah, is a top-ten US auto retailer. KENAN ADVANTAGE: Bank Debt Trades at 18% Discount ------------------------------------------------- Participations in a syndicated loan under which The Kenan Advantage Group Inc is a borrower were trading in the secondary market around 82 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD185 million term loan is scheduled to mature on July 31, 2022. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. KESTREL BIDCO: Bank Debt Trades at 18% Discount ----------------------------------------------- Participations in a syndicated loan under which Kestrel Bidco Inc is a borrower were trading in the secondary market around 82 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD1955 million term loan is scheduled to mature on December 11, 2026. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is Canada. KLOECKNER PENTAPLAST: Bank Debt Trades at 17% Discount ------------------------------------------------------ Participations in a syndicated loan under which Kloeckner Pentaplast of America Inc is a borrower were trading in the secondary market around 83 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The EUR725 million term loan is scheduled to mature on June 30, 2022. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. KNB HOLDINGS: Moody's Cuts CFR & Senior Secured Rating to Caa3 -------------------------------------------------------------- Moody's Investors Service downgraded KNB Holdings Corporation's Corporate Family Rating to Caa3 from Caa1 and the Probability of Default Rating to Caa3-PD from Caa1-PD. Moody's also downgraded the rating on the senior secured first lien term loan to Caa3 from Caa1. The rating outlook is negative. The downgrades reflect KNB's deteriorating operating performance, unsustainable capital structure and weak liquidity. KNB's operating performance will continue to weaken over the next six to twelve months as a result of the coronavirus outbreak, which has resulted in some channel closures and a sudden recessionary environment with increasing unemployment levels in the US. Moody's expects demand for KNB's products to decline materially during the second and third quarters of 2020 as the US experiences recessionary pressure and consumers forgo discretionary purchases. Moody's expects revenue and EBITDA to decline 20% to 25% during 2020 as demand for products sharply decline, previously implemented tariffs remain in place, and retailers continue to right size their inventory levels. These operating headwinds will significantly weaken free cash flow and liquidity and will result in very high financial leverage of over 18x debt/EBITDA by December 2020. A material operational turnaround is necessary to reduce leverage to a sustainable level and improve liquidity, but executing a turnaround will be challenging in light of a recessionary environment, intense industry competition and continuing tariffs. Moody's further expects the company's liquidity to remain very constrained and financial leverage to remain high over the next 12 -- 18 months. Moreover, the downgrade reflects heightened potential for a distressed exchange to help alleviate the strains from high leverage. Moody's took the following rating actions on KNB Holdings Corporation: Ratings downgraded: Corporate Family Rating to Caa3 from Caa1 Probability of Default Rating to Caa3-PD from Caa1-PD Senior secured first lien term loan due 2024 to Caa3 (LGD 3) from Caa1 (LGD 3) The outlook remains negative. RATINGS RATIONALE KNB's Caa3 CFR reflects the highly discretionary nature of the company's products, exposure to economic cycles, very high financial leverage, weak liquidity, and aggressive financial strategies under private equity ownership. The rating further reflects the strains from actions to contain the coronavirus outbreak including closure of stores and recessionary job losses that are a drag on consumer spending. The rating also reflects KNB's leading market position in the niche home decor product sector and product diversification which makes its products appealing to retailers that wish to reduce the number of suppliers. Moody's views liquidity as weak because free cash flows will be slightly negative in 2020 and will not be sufficient to meet the roughly $7 million of required annual term loan amortization. Additionally, the unused capacity of approximately $22MM on the $75 million ABL revolver may be constrained by the springing fixed charge covenant. KNB's $20 million cash balance as of December 2019 and KKR's subsequent $7 million loan provides some additional liquidity support. In terms of Environmental, Social and Governance considerations, the most important factor for KNB's credit profile are governance considerations related to its aggressive financial policies with respect to acquisitions and use of leverage under financial sponsor ownership. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The durables sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in KNB's credit profile, including its exposure to highly discretionary products, have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and KNB remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on KNB of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The negative outlook reflects Moody's expectation that KNB's capital structure will remain unsustainable and that liquidity will continue to weaken absent meaningful operational improvement and debt repayment. KNB's inability to quickly address its operating performance and deteriorating liquidity may result in further increase in default risk or a reduction in recovery estimates that could lead to a downgrade. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be downgraded if liquidity further deteriorates such as from a termination of its account's receivable facility, trade terms tighten, free cash flow becomes more meaningfully negative, or if a significant operational improvement in earnings that will reduce leverage becomes less likely. Other factors that could lead to a downgrade include an increased likelihood of a transaction that Moody's would consider a default, including a distressed exchange, or a lower recovery estimate. Given the company's high financial leverage and weak operating performance, an upgrade is not likely in the next year. In order to warrant an upgrade, the company needs to materially improve its operating performance, strengthen its liquidity position and materially reduce financial leverage. The principal methodology used in these ratings was Consumer Durables Industry published in April 2017. KNB Holdings Corporation is the indirect parent of Nielsen & Bainbridge, LLC, based in Austin, Texas. Nielsen & Bainbridge is a designer and manufacturer of picture framing and presentation products, portable and hardwired lighting products, wall décor (framed art, mirrors, clocks, etc.), indoor and outdoor soft goods, and other home goods. Its products are sold primarily in North America and to a lesser extent in Europe. The company is owned by private equity firm Sycamore Partners and does not file public financial statements. Annual revenue is about $680 million. KNB HOLDINGS: S&P Cuts ICR to 'CCC-' on Deteriorating Liquidity --------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S.-based KNB Holdings Corp. to 'CCC-' from 'CCC+' to reflect its belief that the company's risk of a near-term default has heightened due to tightened liquidity from a severe drop in revenues and EBITDA. S&P is lowering its issue-level ratings on the company's first-lien term loan to 'CCC-' from 'CCC+'. S&P is revising the recovery rating to '4', indicating its expectations for average (30% to 50%, 35% rounded estimate) recovery in the event of a payment default, from '3'. "The downgrade reflects our expectation for constrained liquidity if store closures are prolonged, resulting in a near-term default or debt restructuring. The company's revenues and profitability will likely fall by at least the mid-double-digits since many of its specialty retail customers have temporarily shuttered operations because they have been deemed nonessential. While we expect the company will continue generating sales through ecommerce channels and essential retailers such as mass and home improvement customers, its overhead absorption has decreased. Although the company has minimal fixed costs and has adjusted its variable costs to adapt to lower sales, we still expect it to experience significant monthly cash burn. We expect the coronavirus to peak around the summer time. While stay-at-home mandates may gradually ease and businesses reopen, we expect consumers to remain cautious and for purchasing to remain weak as discretionary spending slowly recovers," S&P said. The negative outlook reflects the risk that the company could default on its obligations or need to restructure its debt during the next several quarters if the current retail environment persists. "We could lower the rating if the company misses a mandatory debt or interest payment or undergoes a distressed restructuring. We would treat any restructuring that does not pay debtholders their entire principal and interest obligations as an event of selective default or default. We believe this could happen if the operating environment does not significantly turn around in the next few months," S&P said. "We could raise the ratings if we expect the operating environment to materially improve or the sponsor or additional investors infuse additional capital such that the company has sufficient liquidity to sustain operations for at least another 12 months," S&P said. KOPPERS HOLDINGS: S&P Lowers ICR to 'B'; Outlook Negative --------------------------------------------------------- S&P Global Ratings lowered the issuer credit rating on U.S.-based Koppers Holdings Inc. to 'B' from 'B+'. The outlook is negative. S&P lowered the issue-level rating on the company's unsecured notes to 'B' from 'B+'. The recovery rating remains '4'. "The downgrade reflects our expectation that economic recessions in many parts of the world, including in the U.S., will depress Koppers' EBITDA and weaken credit metrics in 2020. We expect Koppers to face challenging macroeconomic conditions over the next 12 months. In 2020, we believe the coronavirus pandemic will reduce demand for its products, as consumer spending plunges and business investments decline. The drop in oil prices makes conditions worse. We expect low oil and aluminum prices will hurt prices within the company's carbon materials and chemicals segment (CM&C), exacerbating the impact of expected lower demand. We now expect S&P Global Ratings-adjusted debt to EBITDA will be above 5x and funds from operations (FFO) to debt will be below 12% on a forward-looking (based on 2020 and 2021), weighted-average basis. We previously expected debt to EBITDA below 5x and FFO to debt above 12%," S&P said. The negative outlook reflects S&P's view that demand could be significantly weaker in 2020 due to the global economic slowdown, deteriorating credit metrics and reducing the cushion under financial covenants. In its base case, S&P expects revenues to decline and margins to deteriorate slightly. It now expects weighted-average debt to EBITDA above 5x and minimal cushion under the company's covenants. "We could lower the ratings on Koppers over the next 12 months if we expect weighted-average debt to EBITDA to rise above 7x, with no prospects for improvement, or the company to violate its financial covenants. This could happen if macroeconomic weakness from the coronavirus pandemic proves more severe or lasts longer than our base case, prolonging demand weakness in key end markets. We could also lower the ratings if, combined with earnings pressure, the company undertakes more aggressive financial policies such as issuing debt to make an acquisition or pursue shareholder rewards," S&P said. "We could take a positive rating action within the next 12 months if it appears Koppers will weather the recession without significantly deteriorating its credit measures or by improving its liquidity position. We could revise the outlook to stable within the next 12 months if it increases covenant cushion organically or by a waiver or amendment," S&P said. KRATON CORP: S&P Alters Outlook to Negative, Affirms 'B+' ICR ------------------------------------------------------------- S&P Global Ratings affirmed the 'B+' issuer credit rating on Kraton Corp. and revised the outlook to negative. S&P is affirming the 'BB' rating on the company's euro term loan. The recovery rating remains '1', reflecting S&P's expectation of very high (90%-100%; rounded estimate: 95%) recovery in the event of a payment default. S&P is withdrawing the issue-level rating on the company's USD term loan given it has been repaid in full. S&P is raising its rating on the company's unsecured notes to 'BB-' from 'B+' and revising the recovery rating to '2' from '4'. The '2' recovery rating reflects S&P's expectation of substantial (70%-90%; rounded estimate: 70%) recovery prospects in the event of a payment default. This follows the company's reduction of secured debt from proceeds of the Cariflex business sale. "The negative outlook reflects our expectation that economic recessions in many parts of the world, including in the U.S., will depress Kraton's EBITDA and cause credit metrics to deteriorate in 2020 compared to our previous expectation. We now expect Kraton to face challenging macroeconomic conditions over the next 12 months and credit metrics could be weaker than expectations. We lowered our earnings estimates because of the ongoing global economic downturn and related uncertainty in demand brought about by the COVID-19 pandemic. We expect a slight rebound in 2021 as consumer confidence improves, business investment increases, and macroeconomic pressures subside. We now anticipate funds from operations (FFO) to S&P Global Ratings-adjusted debt will be close to 12% on a forward-looking (based on 2020 and 2021) weighted-average basis, compared to our previous expectation of approaching 20%," S&P said. The negative outlook on Kraton reflects the potential for weakening of earnings and credit measures in excess of what S&P has considered in its base case. Its base case assumes a contraction in the U.S. and European economies, which hurts demand for the company's products. If the downturn is more severe or longer-lasting than S&P's base case, such weakening could prevent the company from reducing debt as quickly as S&P expects in its base-case scenario. S&P's base case assumes the company uses the majority of proceeds from the Cariflex sale to reduce debt in 2020. It expects weighted average FFO to debt to be in the 12% to 20% range. "We could lower the ratings on Kraton over the next 12 months if we expected weighted average FFO to debt to drop below 12%, with no prospects for improvement. We could downgrade the company if macroeconomic weakness from the coronavirus pandemic proves to be more severe or long-lasting that our base case, leading to prolonged weakness in demand for the company's polymers or adhesives. We could also lower the ratings if, combined with earnings pressure, the company undertook more-aggressive financial policies, such as using sale proceeds to make an acquisition or pursue shareholder rewards, instead of reducing debt," S&P said. "We could revise the outlook to stable within the next 12 months if the macroeconomic environment recovers quickly from the coronavirus pandemic with limited signs of permanent demand destruction, causing us to believe the ratio of FFO to total debt would remain comfortably above 12% with no prospects for weakening," the rating agency said. KRS GLOBAL: Gets Interim Approval to Hire Shraiberg as Counsel -------------------------------------------------------------- KRS Global Biotechnology, Inc. received interim approval from the U.S. Bankruptcy Court for the Southern District of Florida to hire Shraiberg, Landau & Page, P.A. as its legal counsel. The firm will substitute for Malinda Hayes, Esq., at Markarian & Hayes, who withdrew as Debtor's attorney in its Chapter 11 case. Shraiberg will provide these services: a. advise Debtor generally regarding matters of bankruptcy law in connection with its case; b. advise Debtor of the requirements of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, applicable bankruptcy rules, including local rules, pertaining to the administration of the case and U.S. Trustee Guidelines related to the daily operation of its business and administration of the estate; c. represent Debtor in all proceedings before the bankruptcy court; d. prepare and review legal documents; e. negotiate with creditors and assist Debtor in the preparation and implementation of a plan; and f. provide other legal services related to the case. The hourly rates for the firm's attorneys range from $325 to $550. Legal assistants charge $225 per hour. Bradley Shraiberg, Esq., and Joshua Lanphear, Esq., the attorneys who will be handling the case, charge $550 per hour and $325 per hour, respectively. The Debtor has agreed to provide the firm with a retainer in the amount of $50,000. Shraiberg neither holds nor represents any interest adverse to Debtor's bankruptcy estate, according to court filings. The firm can be reached through: Bradley S. Shraiberg, Esq. Shraiberg, Landau & Page, P.A. 2385 NW Executive Center Drive, Suite 300 Boca Raton, FL 33431 Telephone: 561-443-0800 Facsimile: 561-998-0047 Email: bss@slp.law Email: jlanphear@slp.law About KRS Global Biotechnology KRS Global Biotechnology, Inc. -- http://krsbio.com/-- owns and operates a human outsourcing facility that provides sterile and non-sterile compounding services to patients, surgery centers, ophthalmology clinics, hospitals, and universities. It is registered with the U.S. Food and Drug Administration as a DEA manufacturer and holds State Board of Pharmacy licenses both in-state and out-of-state. Based in Boca Raton, Fla., KRS Global Biotechnology filed a voluntary Chapter 11 petition (Bankr. S.D. Fla. Case No. 20-10350) on Jan. 10, 2020. At the time of filing, the Debtor was estimated to have up to $50,000 in assets and $10 million to $50 million in liabilities. Judge Mindy A. Mora oversees the case. The U.S. Trustee for Region 21 appointed a committee of unsecured creditors on March 2, 2020. The committee is represented by Brinkman Portillo Ronk, APC. LADDER CAPITAL: Fitch Alters Outlook on BB+ LT IDR to Negative -------------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Issuer Default Ratings and senior unsecured debt ratings of Ladder Capital Finance Holdings LLLP and Ladder Capital Finance Corporation, subsidiaries of Ladder Capital Corp, at 'BB+'. The Rating Outlook has been revised to Negative from Stable. KEY RATING DRIVERS The Rating Outlook revision reflects Fitch's belief that Ladder's liquidity profile has weakened, including a decline in unencumbered assets in excess of the amount required under its covenants, and leverage has increased in recent weeks, as a decline in commercial mortgage-backed securities values has required the firm to pledge additional collateral to its secured repurchase facilities. Additionally, Fitch believes the economic impact of the coronavirus pandemic will result in higher credit losses and weaker earnings for Ladder over the medium term, which could hurt the firm's ability to maintain leverage within its targeted range. The rating affirmations reflect Ladder's established platform as a commercial real estate lender and investor, the strong credit track record to date, which Fitch believes is representative of its conservative underwriting culture, and consistent investment strategy throughout periods of market volatility as a result of its ability to shift between the securities, lending and real estate businesses, which tend to be countercyclical. The ratings also reflect Ladder's granular portfolio, internal management structure and improved funding flexibility following its recent unsecured debt issuance in January 2020. Additionally, Fitch believes that there is a strong alignment of interests between management and shareholders, as evidenced by management and directors owning approximately 11% of the equity in the company. Rating constraints include Ladder's focus on the CRE market, which exhibits volatility through the credit cycle; meaningful proportion of secured debt funding, including secured repurchase facilities, and reliance on wholesale funding; and the absence of a track record as a stand-alone entity through a full credit cycle. At Dec. 31, 2019, Ladder had $2.5 billion of committed, undrawn funding capacity available, consisting of $266.4 million of availability under its unsecured corporate revolving credit facility, $872.3 million of undrawn committed Federal Home Loan Bank (FHLB) financing and $1.4 billion of other undrawn committed secured financings. However, any new FHLB advances will have to be repaid in advance of February 2021. Ladder's unencumbered assets on Dec. 31, 2019, included $58.2 million of unrestricted cash, $1.6 billion of loans, $48.1 million of securities, $59.2 million of real estate and $185.2 million of other assets. Ladder's $1.9 billion unencumbered pool of assets amounted to 1.62x its outstanding unsecured debt, above the 1.2x coverage required by its unsecured notes covenants. As a result, Ladder had excess assets that could be pledged or sold (subject to applicable haircuts) to provide additional liquidity or to meet margin calls. As of April 20, 2020, Ladder noted that it had over $2.3 billion of unencumbered assets, including over $600 million of unrestricted cash, and $1.9 billion of unsecured notes outstanding, which Fitch estimates amounts to an unencumbered asset-to-unsecured notes ratio modestly above 1.2x. Fitch views the reduced cushion relative to the covenant unfavorably but recognizes that the cushion could improve if Ladder uses available cash to pay down outstanding debt. An inability to maintain unencumbered assets at a level that provides sufficient cushion to the covenant would result in a rating downgrade. Ladder's liquidity position is further constrained by its real estate investment trust (REIT) tax election as REITs must generally distribute at least 90% of their net taxable income, excluding capital gains, to shareholders each year. As of April 2, 2020, Ladder noted that it had over $300 million of cash after paying its quarterly cash dividend and that it had met all margin calls. As previously noted, the cash balance increased to over $600 million as of April 20, 2020. Fitch views the firm's ability to meet margin calls favorably, but views the decline in the unencumbered asset ratio unfavorably and believes leverage has likely increased as Ladder sought to shore up liquidity amid the market volatility. Ladder's leverage, defined by Fitch as debt to tangible equity, was 3.2x at YE19. Ladder varies its leverage depending on the risk profile of its portfolio and seeks to manage its adjusted leverage ratio, as measured by debt to equity and excluding any non-recourse borrowings related to securitizations, within a target range of 2.0x to 3.0x. On this basis, Ladder's leverage was 3.0x on Dec 31, 2019, at the high end of the targeted range. A sustained increase in leverage above the targeted range could result in a rating downgrade. Ladder has continued to diversify its funding sources in recent years through additional unsecured debt offerings, which Fitch believes improved the firm's funding flexibility. In January 2020, Ladder issued $750 million of senior unsecured notes and utilized proceeds to repay secured debt. Pro forma for the issuance and repayment of borrowings, Fitch estimates that unsecured debt increased to approximately 39.4% of total debt outstanding (from 24% at Dec. 31, 2019). Ladder's upcoming term debt maturities include $266.2 million of unsecured notes that come due in August 2021 and $500 million of unsecured notes due in March 2022. Additionally, Ladder must repay any FHLB borrowings with maturity dates on or before Feb. 19, 2021, absent a change in FHLB membership rules for mortgage REIT subsidiaries. A sustained reduction in the proportion of unsecured debt to total debt below 35%, resulting from refinancing unsecured debt maturities with secured debt or issuing incremental secured debt, could result in a ratings downgrade. During 2020, Ladder extended the maturity dates on five of its loan repurchase facilities, four of which will mature between December 2023 and December 2024, including all extension options. Ladder also extended the maturity of its committed securities repurchase facility to December 2021 and extended the maturity of its unsecured corporate credit facility to February 2025. Fitch views Ladder's ability to extend these facilities, thereby reducing reliance on short-term borrowings, favorably. Still, Ladder's utilization of repurchase facilities for funding exposes the firm to potential margin calls, which Fitch believes increased during 1Q20. At Dec. 31, 2019, loans represented approximately 53.8% of the company's total investment portfolio, followed by securities (27.6%), real estate properties (16.8%) and other investments (1.8%). Ladder's top property exposures in its loan portfolio at YE19 were multifamily (28% of loans) and office (24% of loans). While Fitch believes Ladder's exposure to borrowers in the hardest hit industries, including hotels (11% of loans) and retail (11% of loans), are manageable, social distancing guidelines have pushed the U.S. economy toward a recession, which will likely have credit implications across the portfolio. Fitch believes that asset quality metrics will deteriorate in 2020, but would view a material increase in losses negatively. Ladder's loan portfolio totaled $3.4 billion at Dec. 31, 2019, with an average loan balance of $18 million, limiting individual loss exposures. Core earnings to average assets and core earnings to average equity were 2.9% and 11.6%, respectively, in 2019, down from 3.7% and 14.7%, respectively, in 2018, largely driven by higher gains from real estate sales in the prior year. Ladder's earnings will be negatively affected by lower interest rates in 2020 given the floating-rate nature of the loan portfolio (74% of loans at YE19), although the impact will be mitigated by the presence of interest rate floors in all floating-rate loans. An increase in non-accrual loans would further pressure the firm's earnings. The equalization of the senior unsecured debt rating with Ladder's IDR reflects the availability of unencumbered assets, suggesting average recovery prospects for debtholders under a stressed scenario. As previously noted, Ladder adheres to a 1.2x unencumbered assets to unsecured debt covenant, which should provide protection to bondholders during periods of market stress. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade include a sustained increase in adjusted leverage above 3.0x, a significant reduction in liquidity, an inability to maintain unencumbered assets at a level that provides sufficient cushion to the covenant, a material increase in credit losses and/or a sustained reduction in the proportion of unsecured debt funding below 35%. Factors that could, individually or collectively, lead to positive rating action, including a revision of the Rating Outlook to Stable, include an ability to sustain leverage within the targeted range, while maintaining sufficient liquidity, unencumbered assets in excess of the amount required under the covenant, relatively stable credit performance and unsecured debt to total debt of at least 35%. The unsecured debt ratings are sensitive to changes to Ladder's IDR and the level of unencumbered balance sheet assets relative to outstanding debt. An increase in secured debt and/or a sustained decline in the level of unencumbered assets, to such an extent that expected recoveries on the senior unsecured debt were adversely affected, could result in the unsecured debt ratings being notched down from the IDR. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Financial Institutions issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. CRITERIA VARIATION In Fitch's Non-Bank Financial Institutions Rating Criteria, the core earnings and profitability benchmark ratio for balance sheet intensive finance and leasing companies is pre-tax income/average assets. Fitch believes that core earnings, as defined by Ladder, is a more useful measure of earnings performance than reported pre-tax income because core earnings excludes certain non-cash expenses and unrecognized results and eliminates timing differences related to securitization gains and changes in the values of assets and derivatives. Therefore, the primary earnings and profitability benchmark used in this analysis is core earnings/average assets. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG CONSIDERATIONS ESG issues are credit neutral or have only a minimal credit impact on the entity(ies), either due to their nature or the way in which they are being managed by the entity(ies). LADDER CAPITAL: S&P Places 'BB-' ICR on Watch Negative ------------------------------------------------------ S&P Global Ratings said it placed its 'BB-' issuer credit rating, as well as its 'B+' unsecured debt ratings, on Ladder Capital Finance Holdings LLLP on CreditWatch with negative implications. The CreditWatch placement reflects near-term maturities on over $1 billion in securities repurchase agreements that pose risks to funding and liquidity. The company's funding includes $1.8 billion drawn on its repurchase facilities as of year-end 2019. Ladder uses roughly $1.1 billion of this amount to fund its mostly investment-grade securities portfolio; the remainder funds its transitional CRE loans. The securities-related repurchase agreements are mostly short term, maturing over the next six months. "We think there could be potential liquidity risks from margin calls on the company's securities portfolio and its loan portfolio. While the risk of margin calls seems to have abated over the past couple of weeks, we continue to see an elevated risk of margin calls. These could occur due to significant credit deterioration in Ladder's loan portfolio or a possible resurgence of the credit spread widening on its securities portfolio in the wake of the COVID-19 pandemic," S&P said. "We expect to resolve the CreditWatch within the next 90 days, if not sooner. We could lower the ratings if Ladder does not substantially reduce its exposure to short-term repurchase agreements, or we believe liquidity is eroded by margin calls on its loan or securities related repurchase facilities. We could lower the ratings by one or more notches if there is an increase in the risks of liquidity being depleted, or if the company's cushion in its covenants erodes. We could affirm the ratings if Ladder substantially reduces its exposure to short-term repurchase agreements; liquidity remains adequate, in our view; and the firm maintains leverage within our expectations for debt to adjusted total equity of 2.75x-3.5x," S&P said. LANAI HOLDINGS III: Moody's Cuts CFR to Caa2, Alters Outlook to Neg ------------------------------------------------------------------- Moody's Investors Service downgraded the ratings of Lanai Holdings III, Inc.'s including the Corporate Family Rating to Caa2 from Caa1 and the Probability of Default Rating to Caa2-PD from Caa1-PD. Moody's also downgraded the senior secured first lien credit facilities rating to Caa1 (LGD 3) from B3 (LGD 3). Moody's affirmed the Caa3 (LGD 5) rating on the senior secured second lien term loan. The outlook is revised to negative from stable. The downgrade reflects significant challenges Lanai faces in reducing financial leverage given high interest costs and weak operating performance. Moody's expect that that demand for physical therapy products and services will remain weak during the coronavirus pandemic, pressuring the credit profile by keeping financial leverage very high. In addition, the pace and timing of a recovery is highly uncertain. Given adjusted debt/EBITDA in excess of 8x, there is significant uncertainty about the company's longer-term ability to sustain its current capital structure and an increasing likelihood of debt impairment. Following is a summary of Moody's rating actions on Lanai Holdings III, Inc.: Ratings downgraded: Corporate Family Rating, to Caa2 from Caa1 Probability of Default Rating, to Caa2-PD from Caa1-PD Senior secured first lien credit facilities, to Caa1 (LGD 3) from B3 (LGD 3) Ratings affirmed: Senior secured second lien term loan, at Caa3 (LGD 5) Outlook action: The rating outlook was changed to negative. RATINGS RATIONALE Lanai's Caa2 Corporate Family Rating reflects the company's very high financial leverage and weak operating performance despite some evidence of an improvement in recent quarters. Moody's believes that Lanai's inability to grow earnings and cash flow has led to a significant deterioration in liquidity, making the current capital structure increasingly unsustainable. The rating also reflects Lanai's modest scale compared to other broad line medical distributors and significant operational challenges with respect to sustainably improving earnings and cash flow. These challenges are further compounded by the current macro-economic downturn prompted by the spread of the coronavirus pandemic. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. While Lanai has made some progress on the integration of the Performance Health acquisition and the implementation of an Enterprise Resource Planning system, financial leverage will remain very high, and interest coverage and free cash flow will remain weak. This creates a high degree of uncertainty whether the company can sustain its existing capital structure. The Caa2 rating is supported by Lanai's leadership in its niche distribution market and the fact that a significant percentage of revenues are from relatively stable, repeat sales of low-cost consumable products. Lanai also benefits from favorable long-term industry dynamics, underscored by rising demand for rehabilitation products due to the aging US population, which is a positive social consideration. Moody's regards the coronavirus outbreak as a social risk under Moody's ESG framework, given the substantial implications for public health and safety. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. Environmental risks are not considered material to the overall credit profile of Lanai. Governance considerations are material to Lanai's credit profile due to its private equity ownership which increases the risk of shareholder-friendly actions that come at the expense of creditors. Moody's anticipates that Lanai's liquidity will remain weak based on Moody's expectations of limited cash levels and covenant headroom as well as uncertainty over the company's ability to generate positive free cash flow in 2020. The negative outlook reflects the challenges Lanai faces in improving its capital structure in light of pressure on earnings and cash flow. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if there is a material deterioration in operating performance or liquidity or if the company's capital structure becomes unsustainable, raising refinancing risk. Given the pressures facing the company, Moody's does not foresee an upgrade of the rating over the near-term. An upgrade would require sustainable improvement in the company's operating performance, as well as a strengthened liquidity position. The principal methodology used in these ratings was Distribution & Supply Chain Services Industry published in June 2018. Lanai, through its ownership of Performance Health, is a specialty distributor serving the rehabilitation and sport medicine market. The company is also a marketer and manufacturer of branded health, wellness and self-care products both in the US and international markets. The company is primarily owned by private equity firm Madison Dearborn Partners. Annualized revenues total approximately $600 million. LEAWOOD PROPERTIES: $535K Sale of Leawood Office Condo Unit 150 OKd ------------------------------------------------------------------- Judge Robert D. Berger of the U.S. Bankruptcy Court for the District of Kansas authorized Leawood Properties, LLC's sale of the real property located at 11201 Nall Avenue, Unit 150, Leawood, Kansas to Angela D. Robinson for $535,000. The mortgage lender Bank of the West will be paid $297,977 (payoff as of 4/15/20) and the University Park Owners Association will be paid $27,197. The United States Trustee's quarterly fees for the first quarter of 2020 and the second quarter of 2020 will be paid by the title company at the time of closing of the sale. About Leawood Properties Based in Leawood, Kansas, Leawood Properties, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Kan. Case No. 20-20182) on Feb. 4, 2020, listing under $1 million in both assets and liabilities. Judge Robert D. Berger oversees the case. LEONID LEVITSKY: $525K Sale of Englewood Property Approved ---------------------------------------------------------- Judge Stacey L. Meisel of the U.S. Bankruptcy Court for the District of New Jersey authorized Leonid Levitsky's sale of the commercial property located at and know as 46 Bergen Street, Englewood, New Jersey to Livinglyush, LLC for $525,000. The sale is free and clear of all liens, claims and encumbrances. The liens, claims and encumbrances will attach only to the proceeds of the sale of the Property in the order of their priority after payment of all expenses. The Debtor is authorized and entitle to pay the secured claim of PNC Bank, who holds a mortgage on the real estate property, and said secured claim will be paid in full from the Sale Proceeds upon the payoff letter at the Closing. All of the Debtor's obligations for outstanding real estate taxes on the Real Estate Property will be paid from the Sale Proceeds at the Closing. All title company fees due and Owing by the Debtor. with respect to the Commercial Property will be paid from the Sale Proceeds at the Closing. The terms and conditions of the Order will be immediately effective and enforceable upon its entry. Leonid Levitsky sought Chapter 11 protection (Bankr. D. N.J. Case No. 16-33296) on Nov. 16, 2017. The Debtor tapped Alla Kachan, Esq., at Law Offices of All Kachan, PC, as counsel. LIFE TIME: S&P Cuts ICR to 'CCC+' on Pandemic-Related Closures -------------------------------------------------------------- S&P Global Ratings lowered the issuer credit rating on Life Time Inc. to 'CCC+' from 'B-' with a developing outlook, lowered its senior secured issue-level rating to 'B' from 'B+', and its senior unsecured issue-level rating to 'CCC-' from 'CCC'. The recovery ratings remain '1' and '6', respectively. At the same time, S&P removed all of the ratings on the company from Credit Watch, where ite placed them with negative implications on March 20, 2020 "The downgrade reflects our assumption that Life Time will experience a spike in leverage and a significant cash burn rate while gyms are closed and possibly during the early months of re-openings, which could use a substantial portion of the company's liquidity and possibly result in an unsustainable capital structure. We assume no revenue while gyms are closed, and the beginning of recovery in the third quarter of 2020 under our base case for virus containment midyear 2020. In our base case, we estimate revenue could ramp to 50% of historical revenue in the third quarter of 2020, and improve further in the fourth quarter," S&P said. The developing outlook means an upgrade or downgrade are equally likely over the next 12 months depending on the duration of gym closures, economic conditions, consumer behavior and the company's ability to preserve its liquidity. The upside reflects the possibility for leverage to improve under S&P's midyear containment and second-half recovery scenario to a level in line with a higher rating. The downside reflects the possibility the company may face a near-term default, in the absence of a liquidity-enhancing transaction, under its current cash burn rate if containment and club re-openings do not occur midyear. "We could lower our rating if we expect the company's liquidity position to worsen, or we believe it is likely to default or enter into a debt restructuring of some form in the next 12 months," S&P said. "Although unlikely over the next several quarters and until gyms reopen and ramp up revenue, we could consider a one-notch upgrade or more if we believe the company can sustain positive cash flow, and is likely to materially reduce leverage to below 7x following the COVID-19 containment period," S&P said. LIGADO NETWORKS: Bank Debt Trades at 62% Discount ------------------------------------------------- Participations in a syndicated loan under which Ligado Networks LLC is a borrower were trading in the secondary market around 38 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD3.138 billion PIK term loan is scheduled to mature on December 7, 2020. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. LIGHTSTONE HOLDCO: S&P Lowers Senior Secured Debt Rating to 'B+' ---------------------------------------------------------------- S&P Global Ratings lowered its rating on Lightstone HoldCo LLC's senior secured debt to 'B+' from 'BB-' and revised its recovery rating on the debt to '3' from '2'. Lightstone is a merchant power portfolio comprising four assets in the Pennsylvania-Jersey-Maryland (PJM) Interconnection American Electric Power (AEP) region with a combined capacity of about 5.3 gigawatts (GW). There are three gas assets (Lawrenceburg, Waterford, and Darby) and one supercritical coal asset (Gavin) included in the portfolio. Lawrenceburg and Waterford are baseload combined cycle gas turbines (CCGTs), while Darby is a combustion turbine (CT) peaker (a type of power plant that generally runs only when there is high demand for electricity). The breakdown of capacity by asset is: -- Darby--484 megawatts (MW; 9%) -- Gavin--2,721 MW (51%) -- Lawrenceburg--1,211 MW (23%) -- Waterford--894 MW (17%) "Based on current and forward power prices in the PJM region, we expect Lightstone's energy margins and spark spreads to be considerably weaker on a forward-looking basis than we previously forecast. We also expect weak capacity prices in the next two auctions in the PJM-RTO region. This, combined with project's underperformance in 2019 and reduced demand due to the coronavirus pandemic, leads us to expect to it will have a higher outstanding debt balance at the maturity of its term loan B in January 2024 and weaker coverage ratios during the life of the assets," S&P said. The stable outlook reflects S&P's expectation for sound operational performances at all four plants, DSCRs above 1.5x during most years prior to maturity, and power and capacity prices that do not decline materially from the rating agency's current base-case assumptions. S&P expects the project to have about $1.4 billion outstanding on its term loan at maturity and a minimum DSCR of 1.28x during the refinancing period. "We could lower our rating if the project fails to sweep material cash prior to maturity such that its expected DSCRs fall below 1.2x on a sustained basis over the assumed refinance tenor. This would likely be caused by further mild weather or unplanned operational outages that lead to a higher level of debt outstanding at refinancing. This would likely also coincide with a weaker downside case in which the project fails to meet its financial obligations for more than three years," S&P said. "While unlikely in the near term, we could raise our rating if the project's minimum DSCR increases to notably above 1.5x on a sustained basis and its downside performance improves materially. This could occur due to higher-than-expected capacity payments in uncleared periods or higher spark spreads," S&P said. LJ RUBY: S&P Downgrades ICR to 'B-' on Expected Lower Demand ------------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating on U.S.-based industrial distributor LJ Ruby Holdings LLC (LJ Ruby) to 'B-' from 'B'. At the same time, S&P lowered its issue-level rating on the company's first-lien term loan to 'B-' from 'B' and its rating on the company's second-lien term loan to 'CCC' from 'CCC+'. The '3' and '6' recovery ratings on the first- and second-lien debt, respectively, remain unchanged. "The downgrade reflects our view that lower end-market demand will cause revenue and profitability of LJ Ruby to fall, resulting in higher leverage. We now expect the company's S&P Global Ratings-adjusted debt to EBITDA will exceed 6x through 2021, up from our previous expectation of about 5.5x or lower. In our view, slow industrial activity in the U.S. will dampen demand for products in the company's machinery, material handling, metals, mining, construction, transportation, chemicals, and plastics end markets." However, the company's exposure to the more stable food and beverage, water, and heath care end markets will partially offset volume declines," S&P said. The negative outlook reflects the risk that a prolonged economic downturn from the COVID-19 pandemic could hinder the company's ability to generate cash flow, weakening credit metrics beyond S&P's base-case forecast. "We could lower our rating if LJ Ruby cannot generate positive free cash flow, resulting in weaker liquidity and causing us to view its capital structure as unsustainable. We could also lower our rating if we believe the company will likely breach its financial covenant over the next 12 months," S&P said. "Although we expect leverage will remain high over the next 12 months, we could revise our outlook to stable if we believe adjusted leverage will not deteriorate materially beyond our base case and if we believe the company will generate positive free cash flow on a consistent basis. This could occur if the U.S. economy rebounds and the company grows its revenues and margins in 2021," S&P said. LONGVIEW INTERMEDIATE: Moodys' Cuts Rating on $286.5MM Loan to C ---------------------------------------------------------------- Moody's Investors Service downgraded Longview Intermediate Holdings C, LLC's $286.5 million 6-year senior secured Term Loan B due April 2021 to C from Ca. The outlook is changed to stable from negative. These actions follow Longview's announcement that it had filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Court for the District of Delaware to effectuate its pre-packaged Plan of Reorganization. Subsequent to the rating action, Moody's will withdraw all of Longview's ratings due to the bankruptcy filing. RATINGS RATIONALE FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The downgrade to C from Ca reflects the expected recovery prospects for senior secured lenders that are below 35% based upon its understanding of the terms of the April 13th pre-packaged bankruptcy filing by Longview. The rating action and recovery prospects incorporate the depressed view around merchant coal-fired electric generation power projects owing in part to sustained low operating margins and cash flow relative to debt along with the narrowing investor lender base for coal-fired generation assets caused by Environmental, Social, and Governance (ESG) considerations. To that end, on April 13th, the majority of lenders and Longview entered into a restructuring support agreement whereby the lenders will be providing a new $40 million exit term loan facility as well as a 90% equity stake in Longview based upon their pro rata share participation in the senior secured credit facilities. Longview is a special purpose entity that owns and operates a 700 MW supercritical pulverized coal-fired power plant located in Maidsville, West Virginia, just south of the Pennsylvania border and approximately 70 miles south of Pittsburgh, PA. Energy and capacity is sold on a merchant basis into PJM's wholesale energy and capacity markets. Coal for the project is purchased from third-party providers via long-term contracts following the closure of the Mepco mine in March 2018. Water for the project is drawn from the Monongahela River, via a pipeline and treatment facility constructed by Dunkard Creek Water System LLC (Dunkard), another Longview affiliate. Mepco and Dunkard are both subsidiaries of Longview's parent, Longview Intermediate Holdings and are part of the collateral package pledged to the Longview lenders. The principal methodology used in this rating was Power Generation Projects published in June 2018. LSF9 ATLANTIS: Moody's Alters Outlook on B2 CFR to Negative ----------------------------------------------------------- Moody's Investors Service Inc. changed LSF9 Atlantis Holdings, LLC (dba "Victra") outlook to negative from stable, and affirmed all ratings, including the B2 corporate family rating. Affirmations: Issuer: LSF9 Atlantis Holdings, LLC Probability of Default Rating, Affirmed B2-PD Corporate Family Rating, Affirmed B2 Senior Secured Bank Credit Facility, Affirmed B2 (LGD3) Outlook Actions: Issuer: LSF9 Atlantis Holdings, LLC Outlook, Changed To Negative From Stable RATINGS RATIONALE "The outlook change to negative reflects the stress that will be placed on Victra's credit metrics as a result of the coronavirus driven reductions in store traffic," stated Moody's Vice President Charlie O'Shea. "As an essential retailer, Victra's stores can remain open, excluding those that are located in malls, however there will be meaningful traffic and sales reductions during the various lockdown and stay-in-place requirements in many municipalities," continued O'Shea. "Once the restrictions are lifted, Moody's expects Victra's operations to recover such that the stress to its credit profile will be relatively brief in scope." Victra's governance is a key rating constraint given the aggressive financial strategy decisions of its financial sponsor and owner, Lone Star Funds, including two debt financed dividends totaling $135 million in 2017, resulting in elevated leverage levels. Moody's view also considers the negative impact on the company's credit metrics due to the coronavirus, the company's reliance on cellphone manufacturers for continued product innovation and the risk of volatile customer demand related to new product introductions. A lengthening customer replacement/upgrade cycle and declines in wireless activations are also constraints. The company is supported by the competitive advantages and franchise strength that result from Victra's position as Verizon's largest independent retailer, its favorable qualitative profile that benefits from the nondiscretionary nature of cell phones, and good liquidity. In addition, Moody's considers the benefits derived from its mutually beneficial relationships with Verizon Communications Inc. (Baa1 positive) and cellphone manufacturers, which is a competitive advantage over smaller operators. The negative outlook reflects Moody's concern regarding the severity of the deterioration to credit metrics due to the impact on store traffic and revenues emanating from the coronavirus pandemic. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The non-food retail sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Victra's credit profile, including its exposure to mall closures, reduced customer traffic as a result of municipality lock down measures and a slowing cellphone upgrade cycle have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Victra remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Victra's of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be downgraded if liquidity were to weaken, or if either deteriorating operating performance and/or financial strategy actions resulted in debt/EBITDA sustained near 6.0x times or EBIT/Interest sustained near 1.0x. Given the negative outlook an upgrade is currently unlikely. However, ratings could be upgraded if Victra maintains a conservative financial strategy towards shareholder returns and future acquisitions, with improving operating performance. Quantitatively, ratings could be upgraded if debt/EBITDA approaches 4.75x, and EBIT/Interest is sustained around 1.5x. The principal methodology used in these ratings was Retail Industry published in May 2018. LFS9 Atlantis Holdings, LLC and subsidiaries, including A2Z Wireless Holdings operating under the Victra brand name, is the largest Verizon independent retailer and operates 1,005 stores in 46 states. The company is majority owned by Lone Star Funds and its affiliates. Revenue for the last twelve-month period ended September 30, 2019 was approximately $1.5 billion. LUCID ENERGY: $950M Bank Debt Trades at 42% Discount ---------------------------------------------------- Participations in a syndicated loan under which Lucid Energy Group II Borrower LLC is a borrower were trading in the secondary market around 58 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD950 million term loan is scheduled to mature on February 18, 2025. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. LUCID ENERGY: Bank Debt Trades at 42% Discount ---------------------------------------------- Participations in a syndicated loan under which Lucid Energy Group II Borrower LLC is a borrower were trading in the secondary market around 58 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The US$125 million term loan is scheduled to mature on February 18, 2025. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. MILK SPECIALTIES: Bank Debt Trades at 17% Discount -------------------------------------------------- Participations in a syndicated loan under which Milk Specialties Co is a borrower were trading in the secondary market around 83 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The US$474 million term loan is scheduled to mature on August 16, 2023. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. MISTER CAR WASH: S&P Upgrades ICR to 'CCC+'; Outlook Negative ------------------------------------------------------------- S&P Global Ratings raised its issuer credit rating on Mister Car Wash Holdings Inc. (MCW)to 'CCC+' from 'SD'. The rating agency had earlier lowered its issuer credit rating on MCW to 'SD' (selective default) after the company executed an amendment to its second-lien term loan to allow it to make pay-in-kind (PIK) interest payments for the March, June, and September quarters of 2020. Meanwhile, S&P is affirming its issue-level rating on the company's first-lien debt, which was unaffected by the restructuring. The second-lien term loan is unrated. The upgrade reflects MCW's additional liquidity due to its execution of a PIK interest payment in March, the recent debt investment from its private-equity owner Leonard Green, and its lack of near-term debt maturities. However, S&P still views the company's capital structure as unsustainable over the longer term because of the massive near-term disruption due to the coronavirus pandemic and the ongoing challenges it faces to support its business model. The negative outlook reflects the heightened uncertainty around the effects of the coronavirus pandemic and the related recession on MCW's operating performance. A prolonged shutdown coupled with lower discretionary spending could affect the company's ability to recover operationally. "We could lower our rating on MCW if a prolonged shutdown or slow recovery leads to a higher cash burn rate than we expected, increasing the likelihood of a liquidity shortfall or covenant breach. We could also lower the rating if we believe the company will likely consider a distressed exchange offer or below-par redemption in the next 12 months," S&P said. "We could raise our rating on MCW or revise our outlook to stable if we believe it is on track to improve its operating performance, including a sustainable capital structure, positive free cash flow, and more than 15% of headroom under its springing covenant," S&P said. MONTREIGN OPERATING: Moody's Withdraws Caa3 CFR on Debt Repayment ----------------------------------------------------------------- Moody's Investors Service has withdrawn Montreign Operating Company, LLC's Caa3 Corporate Family Rating, the Caa3-PD Probability of Default Rating, the Caa3 ratings on the 1st lien term loan A maturing 2022 and the 1st lien term loan B maturing 2023 and the Negative Outlook. The rating action follows the full repayment and cancellation of these credit facilities. Withdrawals: Issuer: Montreign Operating Company, LLC Probability of Default Rating, Withdrawn, previously rated Caa3-PD Corporate Family Rating, Withdrawn, previously rated Caa3 Senior Secured Bank Credit Facility, Withdrawn, previously rated Caa3 (LGD3) Outlook Actions: Issuer: Montreign Operating Company, LLC Outlook, Changed to Rating Withdrawn from Negative RATINGS RATIONALE Moody's has decided to withdraw the ratings because Montreign's debt previously rated by Moody's has been fully repaid. COMPANY PROFILE Montreign, a wholly-owned indirect subsidiary of Empire Resorts, Inc. (not-rated), owns and operates Resorts World Catskills, a casino resort which opened to the public on February 8, 2018. Resorts World Catskills is located in Sullivan County, New York, approximately 90 miles from New York City. MRO HOLDINGS: Moody's Lowers CFR to Caa1, Outlook Negative ---------------------------------------------------------- Moody's Investors Service downgraded its ratings for MRO Holdings, Inc, including the company's corporate family rating (CFR, to Caa1 from B2) and probability of default rating (to Caa1-PD from B2-PD), as well as the rating for its senior secured term loan (to Caa1 from B2). The ratings outlook is negative. RATINGS RATIONALE The downgrades reflect Moody's expectation of meaningfully lower airline traffic volumes for the balance of 2020 and for much of 2021 due to the disruptive effects of the coronavirus pandemic, which in turn will result in reduced throughput for MROH's maintenance, repair and overhaul operations, lower earnings and a weaker set of key credit metrics. The downgrades also consider MROH's deemed weak liquidity profile, with limited availability under the company's bilateral revolving credit facilities and Moody's expectation of weak cash generation during 2020. The Caa1 CFR balances MROH's small size and limited operating history as a consolidated entity against a growing presence as a provider of airframe MRO services. Moody's anticipates a challenging operating environment for MROH for at least the balance of 2020, as the company's customers -- primarily comprised of US airlines -- experience significantly lower passenger volumes. MROH already has a relatively high degree of financial leverage (debt-to-EBITDA of around 5.25x at December 2019), and Moody's expects leverage and other key credit measures to weaken further over the coming quarters. The rapid and widening spread of the coronavirus outbreak, the deteriorating global economic outlook, falling oil prices and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The aerospace sector has been adversely affected by the shock given its exposure to the airline industry, and ultimately consumer demand and market sentiment. More specifically, MROH's exposure to commercial aerospace coupled with its weakening financial profile leave it vulnerable to shifts in market sentiment in these unprecedented operating conditions, and the company remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its actions reflect the impact on MROH of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The negative ratings outlook reflects uncertainty as to the degree and duration of the disruptive effects of the coronavirus, and Moody's expectation of revenue and earnings pressure through at least the end of 2020. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to a ratings upgrade include expectations of a more stable operating environment for MROH and its airline customers and less disruption from the coronavirus. Any upgrade would be predicated on expectations of a good liquidity profile, with sustained free cash flow-to-debt at least in the low to mid-single digit range coupled with sufficient cash balances and access to committed sources of external financing. Improved operating performance of the Flightstar facility and a track record of strong operational execution at TechOps and Aeroman would be prerequisites to any upgrade. Given the company's relatively small size, Moody's would expect MROH to maintain credit metrics that are stronger than levels typically associated with larger and more diverse companies at the same rating level. Factors that could lead to a ratings downgrade include debt-to-EBITDA that is expected to remain above 6.5x. A weakening liquidity profile with expectations of significant negative free cash flow during 2020 and/or a diminution of cash balances could also pressure ratings downward. An inability to extend existing revolver commitments or a reduction in or expiration of such commitments could also pressure ratings downwards. A leveraging debt-financed acquisition or further shareholder distributions could also result in a ratings downgrade. The following is a summary of its rating actions: Issuer: MRO Holdings, Inc Corporate Family Rating, downgraded to Caa1 from B2 Probability of Default Rating, downgraded to Caa1-PD from B2-PD Senior secured term loan due 2026, downgraded to Caa1 (LGD3) from B2 (LGD3) Outlook, Changed to Negative from Stable MRO Holdings, Inc is a provider of maintenance, repair and overhaul services to airline and freight carrying customers in North America. The company owns and operates two MRO facilities based in El Salvador ("Aeroman") and Florida, US ("Flightstar") and also has rights to capacity at TechOps Mexico's operations (a joint venture between Delta Airlines and Aeromexico). Revenues for the twelve months ended December 2019 were around $480 million. MURRAY METALLURGICAL: $750K Sale of All Murray Maple Assets OK'd ---------------------------------------------------------------- Judge John E. Hoffman, Jr., of the U.S. Bankruptcy Court for the Southern District of Ohio authorized Murray Metallurgical Coal Holdings, LLC and its affiliates to sell substantially all assets of Murray Maple Eagle Coal, LLC to Panther Creek Mining, LLC for $750,000, plus assumption of liabilities (approximately $30 million). The Bidding Procedures utilized by the Debtors related to the APA and the Sale are approved and ratified and were appropriate under the circumstances in order to maximize the value obtained from the Sale for the benefit of the estates. Pursuant to Bankruptcy Code section 365(f), notwithstanding any provision of any of the Assigned Contracts or applicable non-bankruptcy law that prohibits, restricts or conditions the assignment of the Assigned Contracts, the Debtors are authorized to assume the Assigned Contracts and to assign the Assigned Contracts to the Buyer, which assumption and assignment will take place on and be effective as of the Closing. The sale is free and clear of all Encumbrances and any Liability, other than the Assumed Liabilities. Any amounts payable or otherwise reimbursable by the Debtors under the APA Documents or any of the documents delivered by the Debtors in connection with the APA Documents, will be paid in the manner provided in the APA Documents without further order of the Bankruptcy Court, will be an allowed administrative claim in an amount equal to such payments. All proceeds and consideration received by the Debtors from the Sale will be distributed pursuant to further orders of the Court, except that the Cure Costs referenced in the Order will be paid at Closing to Powellton and New River, subject to the release of the New River Lien. The Order constitutes a final order within the meaning of 28 U.S.C. Section 158(a). Notwithstanding any provision in the Bankruptcy Rules to the contrary, including but not limited to Bankruptcy Rule 6004(h), the Court expressly finds there is no reason for delay in the implementation of the Order and, accordingly: (a) the terms of the Order will be immediately effective and enforceable upon its entry; (b) the Debtors are not subject to any stay of the Order or in the implementation, enforcement or realization of the relief granted in the Order; and (c) the Debtors may, in their discretion and without further delay, take any action and perform any act authorized under the Order. Time is of the essence in closing the Sale referenced, and the Debtors and Buyer intend to close the Sale as soon as practicable. Any party objecting to the Order must exercise due diligence in filing an appeal, pursuing a stay, and obtaining a stay prior to the Closing, or risk its appeal being foreclosed as moot. About Murray Metallurgical Coal Murray Metallurgical Coal Holdings and its subsidiaries are engaged in the mining and production of metallurgical coal. Unlike thermal coal, which is primarily used by the electric utility industry to generate electricity, metallurgical coal is used to produce cok, which is an integral component of steel production. Murray Met primarily owns and operates two active coal mining complexes and other assets in Alabama and West Virginia. On Feb. 11, 2020, Murray Metallurgical Coal Holdings, LLC and five affiliates each filed a voluntary Chapter 11 petition (Bankr. S.D. Ohio Lead Case No. 20-10390). Murray Metallurgical was estimated to have $100 million to $500 million in assets and liabilities as of the bankruptcy filing. Judge John E. Hoffman, Jr. oversees the cases. The Debtors tapped Proskauer Rose LLP as legal counsel; Evercore Group LLC as investment banker; and Alvarez & Marsal LLC as financial advisor. Prime Clerk LLC, is the claims agent. NATALIA BEVZ: $525K Sale of Englewood Property to Livinglyush OK'd ------------------------------------------------------------------ Judge Stacey L. Meisel of the U.S. Bankruptcy Court for the District of New Jersey authorized Natalia Bevz's sale of the commercial property located at and know as 46 Bergen Street, Englewood, New Jersey to Livinglyush, LLC for $525,000. The sale is free and clear of all liens, claims and encumbrances. The liens, claims and encumbrances will attach only to the proceeds of the sale of the Property in the order of their priority after payment of all expenses. The Debtor is authorized and entitle to pay the secured claim of PNC Bank, who holds a mortgage on the real estate property, and said secured claim will be paid in full from the Sale Proceeds upon the payoff letter at the Closing. All of the Debtor's obligations for outstanding real estate taxes on the Real Estate Property will be paid from the Sale Proceeds at the Closing. All title company fees due and Owing by the Debtor. with respect to the Commercial Property will be paid from the Sale Proceeds at the Closing. The terms and conditions of the Order will be immediately effective and enforceable upon its entry. Leonid Levitsky sought Chapter 11 protection (Bankr. D. N.J. Case No. 16-33296) on Nov. 16, 2017. The Debtor tapped Alla Kachan, Esq., at Law Offices of All Kachan, PC as counsel. Natalia Bevz sought Chapter 11 protection (Bankr. D.N.J. Case No. 18-21814) on June 11, 2018. The Debtor tapped Alla Kachan, Esq., at Law Offices of Alla Kachan, P.C., as counsel. NATIONAL INTERGOVERNMENTAL: Bank Debt Trades at 17% Discount ------------------------------------------------------------ Participations in a syndicated loan under which National Intergovernmental Purchasing Alliance Co is a borrower were trading in the secondary market around 83 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The US$171 million term loan is scheduled to mature on May 23, 2026. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. NAVISTAR INT'L: Moody's Rates $500MM Senior Secured Notes 'B2' -------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to Navistar International's $500 million of new senior secured notes due 2025. Navistar's other ratings are unchanged, including the corporate family rating at B2 and senior unsecured rating at B3. Also unchanged are the rating of its major operating subsidiary, Navistar, Inc, with senior secured term loan at Ba2 and the industrial revenue bonds at B1. The Speculative Grade Liquidity rating remains SGL-3. The outlook is negative. Assignments: Issuer: Navistar International Corp. Gtd Senior Secured Regular Bond/Debenture, Assigned B2 (LGD3) RATING RATIONALE The B2 rating of the new Notes reflects: i) the Note's effective third lien position in all of Navistar's domestic manufacturing assets and intellectual property -- behind the first- and second-lien positions of Navistar, Inc.'s senior secured term loan (Ba2) and industrial revenue bonds (B1), respectively, as well as, ii) a first lien pledge of 65% of the stock of Navistar International B.V. - a holding company that owns Navistar's Mexican, Canadian and Brazilian operations. Based on these relative claims, Moody's expects that the Notes would have an expected recovery rate that is lower than both the term loan and industrial revenue bonds, but superior to the unsecured notes (B3) of Navistar. Pro forma for the $500 million of notes, Navistar's industrial operations have an adequate liquidity position with $1.5 billion in cash at January 2020. With no debt maturities until 2024, this cash position provides ample coverage for a cash burn that could approach $500 million during 2020. The company does not have a bank revolving credit facility, other than Navistar, Inc.'s $125 million ABL facility that is generally used for issuing letters of credits. Navistar's B2 corporate family rating reflects the company's position as the #3 North American producer of medium and heavy trucks, and the progress Navistar has made in strengthening its operating performance and competitive position, including: 1) growth in market share; 2) a decline in warranty expenses; 3) healthy free cash flow (about $400 million in 2019); 4) improved EBITA margin (to 5.8% in 2019); and, 5) a decline in debt-to-EBITDA (to 5.6x at the end of last year). The rating also reflects the severe contraction in demand that the North American medium and heavy truck markets will face due to an anticipated cyclical slowdown, combined with the unprecedented economic stress being caused by the coronavirus outbreak. Navistar is vulnerable to shifts in market sentiment in these unprecedented operating conditions and remains at risk of the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial credit implications of public health and safety. As a result, Moody's estimates that Navistar's 2020 revenues could fall by 25% and that free cash flow could approach a negative $500 million. The negative outlook reflects the significant deterioration that will likely occur in Navistar's operating performance and credit metrics during 2020 as a result of both the coronavirus outbreak and the already-anticipated cyclical slowdown in North American truck demand. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Navistar's rating could be downgraded if the company is not on track to restoring 2019-level financial metrics by 2021. Factors that would contribute to a downgrade include: 1) a cash burn that exceeds $500 million during 2020; 2) market share erosion in key product segments; and, 3) any weakening in the liquidity profile of Navistar and NFC. Prospects for an upgrade during the next twelve months are modest. Nevertheless, an operating performance that is on a clear trajectory to achieve the following metrics could support an upgrade: EBITA margins above 7%, debt to EBITDA sustained below 5x and EBITA/Interest above 3x. Navistar's principal environmental risk is its exposure to increasingly burdensome emissions regulations covering its truck and buses. The company continues to make the investments necessary to remain in compliance with these regulations. The major social risk facing the company emanates from the economic stress resulting from the coronavirus. The company's governance practices have enabled it to pursue successful operating strategies and prudent financial policies. Navistar International Corporation is one of the largest manufacturers in the US and Canadian market for buses, medium, severe service, and heavy duty trucks. The company generated approximately $10.5 billion in revenues (excluding financial services) during the twelve months ending January 31, 2020. NBG ACQUISITION: Bank Debt Trades at 45% Discount ------------------------------------------------- Participations in a syndicated loan under which NBG Acquisition Inc is a borrower were trading in the secondary market around 55 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The US$260 million term loan is scheduled to mature on April 13, 2024. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. NCL CORP: S&P Cuts ICR to 'BB-'; Ratings Remain on Watch Negative ----------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on NCL Corp. Ltd. to 'BB-' from 'BB+'. S&P also lowered all issue-level ratings on the company in line with the lowering of the issuer credit rating. All ratings remain on CreditWatch, where S&P placed them with negative implications on Mar. 10, 2020. "We believe the suspension of cruises will extend into the third quarter and spike NCL's leverage in 2020, and that it's unlikely to improve to under 4x in 2021, the threshold at the previous 'BB+' rating. In our assumed containment scenario, we believe NCL can begin to recover starting in the fourth quarter of 2020 and into 2021. However, a global recession and lingering travel fears could prolong recovery and constrain consumer discretionary spending. As a result, we assume NCL's adjusted leverage may remain high, above 5x, through 2021. This follows a significant deterioration in credit measures and liquidity in 2020 because of a meaningful loss of revenue and cash flow from the COVID-19 pandemic and the suspension of cruising for at least several months," S&P said. "In resolving the CreditWatch listing, we will monitor NCL's efforts to manage liquidity, including steps it might take to minimize the cash burn while operations are suspended, potential further reductions in capital spending, and potential additional financing transactions that might extend maturities or bolster liquidity. We will also continue to monitor efforts to contain the virus and assess how the pandemic might alter or weaken travel and cruise demand over the longer term. We could lower the ratings if we no longer believe that NCL's liquidity will be sufficient to cover our assumed cash burn this year. Additionally, we could downgrade the company if the suspension of sailings extends beyond the third quarter or cruise recovery is longer or weaker than we currently assume," S&P said. NEW CONSTELLIS: Moody's Assigns B3 CFR on Financial Restructuring ----------------------------------------------------------------- Moody's Investors Service has assigned ratings to New Constellis Borrower LLC, including a B3 corporate family rating, following a financial restructuring whereby prior debts were exchanged, collectively for new debt and equity in the post-exchange corporate family. The ratings outlook is stable. With conclusion of the aforementioned financial restructuring on March 27, 2020, all ratings of the previously rated entity (Constellis Holdings, LLC) have been withdrawn. According to Moody's lead analyst, Bruce Herskovics, "through the restructuring process Constellis reduced its debt load by more than $1 billion to about $310 million, and the previously weak liquidity profile has also been resolved." Herskovics continued, "the operational improvement and contract due diligence process that took place through the restructuring period, along with a substantially reduced annual interest burden, should position Constellis to realize steady albeit likely still not robust free cash flow in the coming year." The following rating actions were taken: Assignments: Issuer: New Constellis Borrower LLC Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned B3-PD Senior Secured Term Loan, Assigned Ba3 (LGD1) Senior Secured 1st Lien Term Loan, Assigned B2 (LGD3) Senior Secured 2nd Lien Term Loan, Assigned Caa1 (LGD4) Withdrawals: Issuer: Constellis Holdings, LLC Corporate Family Rating, Withdrawn, previously rated Ca Probability of Default Rating, Withdrawn, previously rated Ca-PD Senior Secured 1st Lien Term Loan, Withdrawn, previously rated B3 (LGD1) Senior Secured 1st Lien Term Loan B, Withdrawn, previously rated Ca (LGD3) Senior Secured 1st Lien Revolving Credit Facility, Withdrawn, previously rated Ca (LGD3) Senior Secured 2nd Lien Term Loan B, Withdrawn, previously rated C (LGD5) Outlook Actions: Issuer: New Constellis Borrower LLC Outlook, Assigned Stable Issuer: Constellis Holdings, LLC Outlook, Changed To Rating Withdrawn From Negative RATINGS RATIONALE The B3 CFR reflects good revenue scale within defense services, over $4 billion of contracted backlog, a relatively moderate leverage profile and a supportive federal budgetary setting against historically erratic operating results, low EBITDA margins (4%-5%) and operational improvement actions that are still unfolding. Estimation of leverage pro forma for the exchange transaction is made complicated by special charges anticipated for the last nine months of 2020. Following the exchange transaction, Moody's views EBITDA leverage in the high-4x range, a relatively low level for the rating, but with free cash flow-to-debt leverage remaining in the financially riskier range of just 2%-3% and more aligned with the assigned rating level. Continuity of the management team that largely joined Constellis in 2018, and the wide scope of operational improvement initiatives undertaken within the business, should enable steadier results in coming years, despite historically poor profitability. Constellis' steady revenue and backlog during the recent period suggest that while profitability and cash flows have been weak for some time, contract execution and service levels remain reasonably good. The Ba3 rating assigned to the $50 million priority first lien term loan and the B2 rating assigned to the $110 million first lien term loan, both above the B3 CFR, reflect the presence of effectively junior debt and non-debt claims that would absorb much of the anticipated loss for creditors in a stress scenario, and the ensuing enhanced recovery estimates for such first-priority secured creditors. The Caa1 rating assigned to the second lien term loan, a notch below the CFR, reflects its weaker recovery prospects in an event of default scenario. The stable ratings outlook reflects that the company held, per Moody's estimates, about $85 million of US unrestricted cash on March 31, 2020. This cash, along with an unutilized asset securitization facility of $55 million, should give the company sufficient financial flexibility and requisite funding to operate the business. Notably, though, the stable ratings outlook anticipates that Constellis will soon arrange a long-term revolving credit line (either cash flow or asset-based), the proceeds of which will be used to repay the $50 million priority first lien term loan that matures in June 2021. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Upward ratings momentum would depend on at least revenue growth in step with the market (minimally 3% per annum), EBITDA margins closer to 6%, debt-to-EBITDA sustained below 5x and free cash flow-to-debt closer to 10%. Downward ratings pressure would follow material backlog declines, a lack of free cash flow generation, and/or liquidity pressure such as from covenants or failure to refinance the priority term loan due June 2021. The rapid and widening spread of the coronavirus outbreak, the deteriorating global economic outlook, falling oil prices and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The aerospace and defense sector has been adversely affected by the shock given its indirect exposure to the severely pressured airline industry and its sensitivity to consumer demand and market sentiment. Constellis' credit profile faces some vulnerability to shifts in market sentiment in these unprecedented operating conditions, and the company remains vulnerable to the outbreak continuing to spread. But most of the company's work entails essential government services support for which activity levels continue without disruption. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its actions reflect the impact on Constellis of the breadth and severity of the shock, and the potential for more meaningful deterioration in credit quality that could develop. Constellis is a provider of essential risk management services, such as security, training, and global support services to government and commercial clients throughout the world. Revenues for the twelve months ended September 30, 2019 were about $1.6 billion. The company is majority-owned by the former first lien lenders of Constellis Holdings, LLC following a financial restructuring that concluded March 27, 2020. NEW MILLENNIUM: Bank Debt Trades at 66% Discount ------------------------------------------------ Participations in a syndicated loan under which New Millennium Holdco Inc is a borrower were trading in the secondary market around 34 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD600 million term loan is scheduled to mature on December 21, 2020. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. NMSC HOLDINGS: Bank Debt Trades at 44% Discount ----------------------------------------------- Participations in a syndicated loan under which Nmsc Holdings Inc is a borrower were trading in the secondary market around 56 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The US$340 million term loan is scheduled to mature on April 19, 2023. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. NOBLE CORP: S&P Downgrades ICR to 'CCC-'; Outlook Negative ---------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.K.-based offshore drilling contractor Noble Corp. PLC to 'CCC-' from 'CCC+'. S&P also lowered its issue-level ratings on the company's unsecured guaranteed debt to 'CCC' from 'B-' (recovery rating: '2'), and senior unsecured debt to 'CCC-' from 'CCC+' (recovery rating: '4'). "The collapse in oil prices has led to a sharp drop in demand for oilfield services, and we expect offshore activity levels to be hit particularly hard. The recent material drop in oil prices—kicked off by the Saudi-Russian price war and worsened by the unprecedented drop in demand as a result of the coronavirus pandemic--has led to sharp reductions in oil producers' capital spending plans for 2020. This will significantly reduce demand for the oilfield services sector. We expect offshore activity levels to be hit particularly hard, given the higher costs, higher operating risk, and longer payback periods for offshore projects relative to onshore plays. Although we believe most ongoing development projects will continue (as long as crews and supplies are available), we expect postponements in reaching final investment decisions on new projects and minimal exploration activity. Offshore producers will likely remain more cautious about committing capital to longer-term projects until oil price fundaments are more stable and prices recover, which could affect Noble's revenues beyond the near term," S&P said. The negative outlook reflects Noble's unsustainable leverage, deteriorating liquidity, and the likelihood that the company could announce a debt exchange or restructuring that S&P would view as distressed. "We would lower the rating if the company announced a debt exchange or restructuring we viewed as distressed," S&P said. "We could raise the rating if we no longer believe a distressed debt exchange is likely and the company improves its liquidity position," S&P said. NORTH AMERICAN LIFTING: Bank Debt Trades at 67% Discount -------------------------------------------------------- Participations in a syndicated loan under which North American Lifting Holdings Inc is a borrower were trading in the secondary market around 33 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD185 million term loan is scheduled to mature on November 27, 2021. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. NORTHSTAR FINANCIAL: Bank Debt Trades at 17% Discount ----------------------------------------------------- Participations in a syndicated loan under which Northstar Financial Services Group LLC is a borrower were trading in the secondary market around 83 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The US$45 million term loan is scheduled to mature on May 25, 2025. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. NORTHWEST HARDWOODS: S&P Cuts ICR to 'CCC-'; Outlook Negative ------------------------------------------------------------- S&P Global Ratings lowered its issuer credit ratings on Tacoma, Wash.–based Northwest Hardwoods Inc. to 'CCC-' from 'CCC'. The outlook is negative. At the same time, S&P lowered its issue-level rating on the company's senior secured notes to 'CCC-' from 'CCC'. "We expect continued weak performance for Northwest Hardwoods as demand remains depressed and pricing remains weak from the impact of COVID-19 on economic activity. Over the past 12-18 months, the company has been adversely affected by weak lumber pricing and lower domestic and export demand, particularly from China (accounting for approximately 15%-20% of total revenues). The impact of tariffs imposed on China during 2019 have resulted in additional downward pressure on sales' volumes. All this has resulted in reported negative EBITDA for full year 2019, and the company has underperformed our previous expectations. Furthermore, over the next few quarters, we believe recessionary conditions following the outbreak of COVID-19 will continue to dampen future demand, both within the U.S. and in China. Hence, despite the company's efforts to curtail expenses, we do not expect any significant improvement in the company's performance over the next few quarters. As a result, we expect earnings to remain negative and the company to generate minimal to neutral free cash flows," S&P said. The negative outlook indicates S&P's belief that the company could likely default, initiate a distress exchange, or pursue a restructuring over the next six months. "We could downgrade the company, likely to 'D', if it missed its next interest payment and we did not expect it to be paid within the grace period. Alternatively, we could lower our rating on the company to 'SD' (selective default) if it announced any type of debt restructuring that we viewed as detrimental to the interest of the existing bondholders," S&P said. "We could revise the outlook to stable or even raise the rating if the company demonstrated significant improvement in earnings such that we believed it might be able to refinance its senior notes at par, at or before maturity in August 2021," S&P said. NPC INTERNATIONAL: Bank Debt Trades at 63% Discount --------------------------------------------------- Participations in a syndicated loan under which NPC International Inc is a borrower were trading in the secondary market around 37 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD605 million term loan is scheduled to mature on April 20, 2024. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. O'HARE FOUNDRY: Proposed Sale of Equipment Approved --------------------------------------------------- Judge Charles E. Rendlen, III of the U.S. Bankruptcy Court for the Eastern District of Missouri authorized O'Hare Foundry Corp. to (i) reject its personal property leases with Wells Fargo Leasing and Leaf, as assignee of Peoples Bank; (ii) abandon the personal property related to the leases which are to be rejected, and by entry of the Order is deemed to have done so; (iii) sell the equipment set forth in Exhibit 1, as it may be amended, outside the ordinary course of its business; and (iv) enter into a consignment contract with FL Sales, Inc., substantially similar to the proposed consignment contract (Exhibit 2). A tentative list of the equipment to be liquidated or surrendered, its owner, and its appraised value is in Exhibit 1. Said list may be altered upon agreement with the lessor or lienholder as appropriate. FL Sales will deliver the sale proceeds directly to MidWest Regional Bank as set forth in the contract. A hearing on the Motion was held on March 31, 2020. A copy of the Exhibits is available at https://tinyurl.com/qw65hrd from PacerMonitor.com free of charge. About O'Hare Foundry Corporation Established in 1921, O'Hare Foundry Corporation -- http://www.oharefoundry.com/-- manufactures sand castings from brass, brass and bronze alloys, and aluminum alloys. O'Hare Foundry Corporation sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mo. Case No. 19-41834) on March 27, 2019. At the time of the filing, the Debtor was estimated to have assets of between $1 million and $10 million and liabilities of between $1 million and $10 million. The case is assigned to Judge Charles E. Rendlen III. The Debtor tapped Danna McKitrick, P.C. as legal counsel; Tueth, Keeney, Cooper, Mohan, and Jackstadt, PC as special counsel; and Stark & Company, P.C., as accountant. O-I GLASS: S&P Lowers ICR to 'B+' on Weak Demand; Outlook Negative ------------------------------------------------------------------ S&P Global Ratings lowered the issuer credit rating on Perrysburg, Ohio-based glass container manufacturing company O-I Glass Inc. to 'B+' from 'BB-', the debt at OI European Group B.V. to 'B+' from 'BB-', and the debt at Owens-Brockway Glass Container Inc. to 'B' from 'B+'. The recovery ratings on the debt are unchanged. Despite OI's classification as an essential business, a broader recession resulting from the coronavirus pandemic will lower sales volumes. Governments have had varying responses to stop the spread of the virus, some of which are affecting the company's end markets. Mexico recently announced the shut-down of brewery operations, directly impacting OI and its joint venture with Constellation Brands. The broad closure of economies in Europe, particularly in Italy and France, has severely limited demand and will lead to much lower volumes, at least through the beginning of Q2. OI's exposure to South America will be equally challenged as countries strictly enforce stay at home orders. S&P believes the halt in sales to dining and other establishments, where product is consumed on premise, will not be fully offset by an increase in home consumption. As OI curtails capacity in response to lower demand, running less lines per furnace, operating leverage will suffer as a result. The negative outlook reflects the uncertainty stemming from the Coronavirus pandemic and its effect on OI's revenues and margins, which could cause leverage to increase further than S&P expects and the company to generate lower cash flows to fund their fixed costs and financial obligations. S&P expects the company to end 2020 with debt leverage above 6x, but with some improvement in 2021 as the global economy recovers from a recession. "We could lower the rating on OI if we expect debt leverage to increase above 7x at year-end with minimal prospects for improvement the following year. This could stem from a broader recession that lasts longer than our current forecasts and/or government actions that further hinder end-markets served by OI, causing further revenue declines and degrading margins," S&P said. "We could revise the outlook to stable if we become more certain the company could maintain debt leverage under 7x this year and preserve its good liquidity position. This could occur as we gain more visibility how effective OI's cash conservation actions help it preserve its net debt position, thereby improving or stabilizing debt leverage. Under this scenario, we would also want to be confident in the company's ability to successfully refinance or repay upcoming debt maturities due over the next two years," S&P said. OBITX INC: Board Sacks CEO Alex Mardikian Over Disagreement ----------------------------------------------------------- Alex Mardikian was terminated by the Board of Directors as chief executive officer of OBITX, Inc., effective as of April 17, 2020. The Company hopes to resolve all differences in a settlement with Mr. Mardikian, while preserving all its rights. On April 17, 2020, Paul Rosenberg resigned as the interim chief financial officer of the Company, effective as of that date. The Company said the resignation of Mr. Rosenberg as the chief financial officer was not due to any disagreements with the Company. Mr. Rosenberg will remain a member of the Board of Directors. On April 17, 2020, the Board of Directors of the Company appointed Michael Hawkins as the interim chief executive officer and chief financial officer of the Company, effective immediately. The Company entered into an employment agreement with Mr. Hawkins that is at will and may be terminated at any time given 30 days written notice. Compensation for Mr. Hawkins will be 10% of all revenue earned for the first 12 months. During this initial 12-month period the Board of Directors will evaluate performance and propose a proper employment package after the initial 12-month period. Board Expansion The Company elected to expand its Board of Directors to five members. Michael Hawkins was appointed to the Board of Directors. Additional board members are expected to be filled within the next 30 days. Mr. Hawkins has more than 20 years' experience as a senior executive officer and director with both public and private companies. Mr. Hawkins has extensive knowledge and expertise in manufacturing, hospitality and entertainment, retail sales, worldwide distribution, cryptocurrencies, and online internet commerce. Mr. Hawkins has a Bachelor of Science degree in Information Systems Management from the University of Maryland, University College. About OBITX, Inc. OBITX, Inc. -- http://www.ObitX.com/-- is engaged in the business of marketing and advertising through its proprietary software. The Company believes that its products will provide its consumers in the tech, internet, blockchain, and cannabis markets with an advertising and marketing approach uniquely designed for them. It provides consulting services in various approaches to marketing and advertising for each customer with an execution plan for the promotion and growth of their business. OBITX reported a net loss of $2.12 million for the year ended Jan. 31, 2019, compared to net income of $688,735 for the year ended Jan. 31, 2018. As of Oct. 31, 2019, the Company had $2.08 million in total assets, $579,598 in total liabilities, and $1.51 million in total stockholders' equity. Dov Weinstein & Co. C.P.A. (Isr), in Jerusalem, Israel, the Company's auditor since 2017, issued a "going concern" qualification in its report dated April 15, 2019, citing that the Company's ability to continue as a going concern is dependent upon raising additional funds through debt and equity financing and generating revenue. There are no assurances the Company will receive the necessary funding or generate revenue necessary to fund operations. These and other factors raise substantial doubt about the Company's ability to continue as a going concern. OBITX INC: Delays Filing of Annual Report Amid COVID-19 Pandemic ---------------------------------------------------------------- OBITX, Inc. filed a current report on Form 8-K with the Securities and Exchange Commission to announce that in light of the circumstances and uncertainty surrounding the effects of the COVID-19 coronavirus pandemic on the Company's business, employees, consultants and service providers, the Company's board of directors and management has determined that it will delay the filing of its annual report on Form 10-K for the year ended Jan. 31, 2020 by up to 45 days in accordance with the SEC's March 4, 2020 Order (Release No. 34-88318), which allows for the delay of certain filings required under the Securities and Exchange Act of 1934, as amended. The Company said its operations and business have experienced disruption due to the unprecedented conditions surrounding the COVID-19 pandemic spreading throughout the United States and the world and thus the Company's business operations have been disrupted and it is unable to timely review and prepare the Company's financial statements for the 2020 fiscal year. As such, the Company will be making use of the 45-day grace period provided by the SEC's Order to delay filing of its Annual Report. The Company will file its Annual Report by no later than June 14, 2020, 45 days after the original due date of its Annual Report. In addition, the Company will be adding the following risk factor to its future periodic reports. "War, terrorism, other acts of violence or natural or man-made disasters, including a global pandemic, may affect the markets in which the Company operates, the Company's customers, the Company's delivery of service, and could have a material adverse impact on our business, results of operations, or financial conditions." Moreover, effective April 17, 2020, the Company has changed its address of corporate headquarters. The business is now located at 3027 US Highway 17, Fleming Island, Florida 32003. About OBITX, Inc. OBITX, Inc. -- www.ObitX.com -- is engaged in the business of marketing and advertising through its proprietary software. The Company believes that its products will provide its consumers in the tech, internet, blockchain, and cannabis markets with an advertising and marketing approach uniquely designed for them. It provides consulting services in various approaches to marketing and advertising for each customer with an execution plan for the promotion and growth of their business. OBITX reported a net loss of $2.12 million for the year ended Jan. 31, 2019, compared to net income of $688,735 for the year ended Jan. 31, 2018. As of Oct. 31, 2019, the Company had $2.08 million in total assets, $579,598 in total liabilities, and $1.51 million in total stockholders' equity. Dov Weinstein & Co. C.P.A. (Isr), in Jerusalem, Israel, the Company's auditor since 2017, issued a "going concern" qualification in its report dated April 15, 2019, citing that the Company's ability to continue as a going concern is dependent upon raising additional funds through debt and equity financing and generating revenue. There are no assurances the Company will receive the necessary funding or generate revenue necessary to fund operations. These and other factors raise substantial doubt about the Company's ability to continue as a going concern. OBITX INC: Newly-Appointed CEO Acquires 150,000 Preferred Shares ---------------------------------------------------------------- Michael Hawkins acquired on April 17, 2020, 150,000 shares of Series A Preferred stock of OBITX, Inc., which he assigned to an entity in which Mr. Hawkins has a controlling interest. The purchase of the shares was at par value. The authorization to acquire the shares was in conjunction with Mr. Hawkins election to be the chief financial officer and chief executive officer of the Company. The Series A Preferred shares cannot be converted into common shares of the Company for a period of two years and has the right to appoint two members to the board of directors. The Company has the right to lien 50,000 of the Series A Preferred shares as security for Mr. Hawkins performance of service. About OBITX, Inc. OBITX, Inc. -- http://www.ObitX.com/-- is engaged in the business of marketing and advertising through its proprietary software. The Company believes that its products will provide its consumers in the tech, internet, blockchain, and cannabis markets with an advertising and marketing approach uniquely designed for them. It provides consulting services in various approaches to marketing and advertising for each customer with an execution plan for the promotion and growth of their business. OBITX reported a net loss of $2.12 million for the year ended Jan. 31, 2019, compared to net income of $688,735 for the year ended Jan. 31, 2018. As of Oct. 31, 2019, the Company had $2.08 million in total assets, $579,598 in total liabilities, and $1.51 million in total stockholders' equity. Dov Weinstein & Co. C.P.A. (Isr), in Jerusalem, Israel, the Company's auditor since 2017, issued a "going concern" qualification in its report dated April 15, 2019, citing that the Company's ability to continue as a going concern is dependent upon raising additional funds through debt and equity financing and generating revenue. There are no assurances the Company will receive the necessary funding or generate revenue necessary to fund operations. These and other factors raise substantial doubt about the Company's ability to continue as a going concern. OCEAN POWER: Nasdaq Extends Compliance Deadline Until Nov. 13 ------------------------------------------------------------- Ocean Power Technologies, Inc. received a written notice from the Nasdaq Stock Market indicating that, as a result of the tolling of the bid price requirements effective April 16, 2020, the period within which the Company has to regain compliance has been extended from Aug. 31, 2020 to Nov. 13, 2020. On March 3, 2020, Ocean Power received a notification from Nasdaq indicating that the minimum bid price of the Company's common stock has been below $1.00 per share for 30 consecutive business days and as a result, the Company is not in compliance with the minimum bid price requirement for continued listing. The Company said it actively monitors the price of its common stock and will consider all available options to regain compliance with the continued listing standards of Nasdaq. Starts Producing Face Shields The Company disclosed it had begun production of face shields for donation to first responders. Certain materials and equipment was donated to the Company to enable them to produce the face shields. About Ocean Power Technologies Headquartered in Monroe Township, New Jersey, OPT -- http://www.oceanpowertechnologies.com/-- offers ocean wave power conversion technology. Its PB3 PowerBuoy solution platform provides clean and reliable electric power and real-time data communications for remote offshore and subsea applications in markets such as offshore oil and gas, defense and security, science and research, and communications. Ocean Power reported a net loss of $12.25 million for the 12 months ended April 30, 2019, compared to a net loss of $10.16 million for the 12 months ended April 30, 2018. As of Jan. 31, 2020, the Company had $13.75 million in total assets, $3.98 million in total liabilities, and $9.77 million in total stockholders' equity. KPMG LLP, in Philadelphia, Pennsylvania, the Company's auditor since 2004, issued a "going concern" qualification in its report dated July 22, 2019, citing that as of April 30, 2019 the Company has cash and cash equivalents of $16.7 million, and the Company has suffered recurring losses from operations and has an accumulated deficit. These factors raise substantial doubt about the Company's ability to continue as a going concern. ODYSSEY LOGISTICS: Bank Debt Trades at 16% Discount --------------------------------------------------- Participations in a syndicated loan under which Odyssey Logistics & Technology Corp is a borrower were trading in the secondary market around 84 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD527 million term loan is scheduled to mature on October 12, 2024. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. OSUM PRODUCTION: S&P Alters Outlook to Negative, Affirms CCC+ ICR ----------------------------------------------------------------- S&P Global Ratings revised its outlook on Calgary, Alta.-based Osum Production Corp. (OPC) and parent company Osum Oil Sands Corp. to negative from stable and affirmed its 'CCC+' long-term issuer credit rating on the company. S&P also affirmed its 'B' issue-level rating on the company's senior secured term loan. The '1' recovery rating, indicating very high recovery (with a capped estimated recovery of 95%), is unchanged. The company's credit profile and rating remain constrained by OPC's small production base and focus on low-value bitumen production. S&P believes OPC's cash flow has a higher volatility pattern because the company is unable to leverage economies of scale to offset the fixed costs inherent in the manufacturing-like steam-assisted gravity drainage (SAGD) thermal oil production process due, in large part, to its small production base. Despite the company's low production costs, which S&P Global Ratings estimates in the C$10-C$12 per barrel range, the 'CCC+' rating continues to reflect OPC's relatively small scale and dependence on favorable market conditions to generate sufficient cash flow to fund all operating and financing spending requirements. The rating affirmation is nevertheless supported by the projected rebound in cash flow metrics beyond 2020 boosted by the combination of higher assumed crude oil prices in 2021, competitive production costs, and decreasing debt, which all contribute to strengthening funds from operations (FFO)-to-debt ratios beyond 2020. Pro forma the March 31, 2020 mandatory cash sweep payment and the July 2020 repayment of the small principal amount not extended at the July 2019 term loan renewal, S&P Global Ratings estimates the company's long-term debt balance will decrease to US$134 million in the second half of 2020. The negative outlook reflects the risk of continued credit profile deterioration if weak crude oil prices persist beyond 2020, which would accelerate cash burn and deplete cash on hand. Moreover, S&P would lower the rating if the company is unable to refinance and extend its 2022 debt maturity within the next 12-14 months. "We could lower the rating if OPC's cash flow generation materially falls short of our expectations, such that the company depletes its cash on hand at an accelerating pace, which would weaken its liquidity position. We could also lower the rating if OPC is unable to extend its debt maturity beyond 2022 within the next 12-14 months. An inability to refinance its long-term debt would increase the probability of a debt restructuring we might characterize as distressed," S&P said. "We could revise the outlook to stable in tandem with strengthening cash flow generation, such that the company would be able to sustain production levels and fully fund all required spending. An outlook revision would also be contingent on the company extending its debt maturity beyond 2022," S&P said. PACIFIC DRILLING: S&P Downgrades ICR to 'CCC-'; Outlook Negative ---------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Luxembourg-based offshore drilling contractor Pacific Drilling S.A. to 'CCC-' from 'CCC+'. The outlook is negative. At the same time, S&P lowered the issue-level rating on the company's 8.375% first-lien senior secured notes due in 2023 to 'CCC' from 'B'. S&P revised the recovery rating to '2' from '1', reflecting its expectation for substantial (70%-90%; rounded estimate: 85%) recovery of principal in the event of a payment default. S&P also lowered the issue-level rating on the company's 11% cash/12% payment-in-kind (PIK) second-lien senior secured notes due in 2024 to 'C' from 'CCC-'. The recovery rating remains '6', indicating S&P's expectation for negligible (0%-10%; rounded estimate: 0%) recovery of principal in the event of a payment default. "We expect demand for offshore drillers will be hurt by the collapse in oil prices. Oil and gas exploration and production companies have announced significant reductions in capital spending plans in response to the sharp drop in oil prices. This will reduce demand for services provided by companies like Pacific Drilling, likely derailing what was an early stage recovery in the fragile offshore market. We expect this will have a lasting impact on the sector, with news of tendering activity being delayed or cancelled, FIDs postponed, and exploration activity being suspended. In addition, many customers are already seeking to terminate or amend drilling contracts currently in place, claiming force majeure amid the global COVID-19 outbreak. As a result, we do not expect Pacific Drilling will realize its full $189 million in backlog it reported as of March 6, 2020," S&P said. The negative outlook reflects Pacific Drilling's unsustainably high leverage and the increased likelihood that the company could engage in a transaction that S&P would view as distressed, given the deterioration in sector conditions and the depressed trading levels on the company's debt. "We could lower the rating if the company engaged in a transaction we consider to be distressed," S&P said. "We could revise the outlook to stable if Pacific's leverage improved and we no longer considered there to be a material risk that the company would engage in a distressed transaction. This would require a more rapid improvement in sector conditions than we currently anticipate, to enable the company to secure new contracts at competitive rates," S&P said. PATRIOT CONTAINER: Bank Debt Trades at 17% Discount --------------------------------------------------- Participations in a syndicated loan under which Patriot Container Corp is a borrower were trading in the secondary market around 83 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD80 million term loan is scheduled to mature on March 20, 2026. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. PAUL F. SMITH: Case Summary & 2 Unsecured Creditors --------------------------------------------------- Debtor: Paul F. Smith, Jr. D.D.S., Inc. 3461 Warrensville Center Rd Suite 306 Beachwood, OH 44122-5227 Business Description: Formed in 2003, Paul F. Smith, Jr. D.D.S owns and operates a dental clinic in Beachwood, Ohio. The Debtor previously sought bankruptcy protection on March 8, 2019 (Bankr. N.D. Ohio Case No. 19-11251). Chapter 11 Petition Date: April 22, 2020 Court: United States Bankruptcy Court Northern District of Ohio Case No.: 20-12102 Judge: Hon. Arthur I. Harris Debtor's Counsel: Gary Cook, Esq. GARY COOK 23880 Commerce Park Suite 2 Beachwood, OH 44122 Tel: 216-965-4410 Email: gcookesq@yahoo.com Total Assets: $166,647 Total Liabilities: $1,393,218 The petition was signed by Paul F. Smith Jr., DDS, owner. A copy of the petition containing, among other items, a list of the Debtor's two unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/nuRKIl PEABODY ENERGY: Moody's Lowers CFR & Sr. Secured Rating to B1 ------------------------------------------------------------- Moody's Investors Service downgraded long-term ratings for Peabody Energy Corporation, including the Corporate Family Rating to B1 from Ba3 and senior secured ratings to B1 from Ba3, based on expectations for weakened earnings and cash flow. The rating outlook is negative. "Peabody has about $1 billion of cash on the balance sheet, but cash usage in 2020 is expected due to deteriorating demand for coal and weak export conditions, coupled with a deteriorating global economic outlook," said Ben Nelson, Moody's Vice President -- Senior Credit Officer and lead analyst for Peabody Energy Corporation. Downgrades: Issuer: Peabody Energy Corporation Corporate Family Rating, Downgraded to B1 from Ba3 Probability of Default Rating, Downgraded to B1-PD from Ba3-PD Senior Secured Revolving Credit Facility, Downgraded to B1 (LGD3) from Ba3 (LGD3) Senior Secured 1st Lien Term Loan, Downgraded to B1 (LGD3) from Ba3 (LGD3) Issuer: Peabody Securities Finance Corporation Senior Secured Regular Bond/Debenture, Downgraded to B1 (LGD3) from Ba3 (LGD3) Outlook Actions: Issuer: Peabody Energy Corporation Outlook, Remains Negative Issuer: Peabody Securities Finance Corporation Outlook, Remains Negative Peabody Securities Finance Corporation is the issuing entity and later merged into Peabody Energy Corporation. RATINGS RATIONALE The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions, and markets. The combined credit effects of these developments are unprecedented. The coal sector has been one of the sectors most significantly affected by the shock given its sensitivity to industrial demand and sentiment. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Peabody's exposure to the breadth and severity of the shock. Moody's expects a very challenging year for the coal industry in 2020 -- including a meaningful reduction in industry-wide demand for metallurgical coal and thermal coal in the next few months driven by an unprecedented shock to the economy due to the coronavirus outbreaks. Moody's expects that demand for steel will fall, causing steel producers to idle blast furnaces and reduce consumption of met coal, and demand for electricity will also fall, causing coal-fired power plants to delay and/or reduce volumes for thermal coal even though much of the industry's anticipated sales volume for 2020 is contracted. In response to weakened market conditions, Peabody has taken aggressive operational and financial actions to preserve liquidity. Moody's also notes that Peabody's mines remain operating despite widespread idling of mining operations by competitors. Before the outbreak of coronavirus, Moody's expected that EBITDA would fall to about $450-500 million (from $837 million in 2019). The company will struggle to generate free cash flow in 2020. This forecast incorporated a series of actions taken to preserve cash, including scaling back capital spending to $250 million in 2020. Now, Moody's expects that EBITDA will fall into the range of $375-400 million and, absent the benefit of one-time actions, will likely have cash usage in 2020. Weak market conditions for export coals are expected to continue in the near term. Export thermal coal pricing is anticipated near the lower bound of its medium-term sensitivity range of $60-90 per metric ton (Newcastle) and export metallurgical near the midpoint of its range of $110-170 per ton (CFR Jingtang) in 2020. Credit metrics calculated using gross debt will weaken, including adjusted financial leverage moving well above 3.0x (Debt/EBITDA). However, Moody's will take into consideration the company's excess cash position, especially after the $300 million temporary draw-down under the revolving credit facility. Moody's also believes that investor concerns related to the coal industry's ESG profile are intensifying and limit the industry's ability to respond to market disruptions in the near term. Access to capital is expected to narrow further in the early 2020s. An increasing portion of the global investment community is reducing or eliminating exposure to the coal industry with greater emphasis on moving away from thermal coal. The aggregate impact on the credit quality of the coal industry is that debt capital will become more expensive over this horizon, particularly in the public bond markets, and other business requirements such as surety bonds, which together will lead to much more focus on individual coal producers' ability to fund their operations and articulate clearly their approach to addressing environmental, social, and governance considerations -- including reducing net debt in the near-to-medium term. Peabody reported about $1.3 billion of debt and $1.4 billion of surety bonds to support reclamation-related items at December 31, 2019. The B1 CFR reflects a diverse platform of cost competitive assets in Australia and the United States, balancing strong credit metrics and cash flow generation in recent quarters with the inherent volatility of the metallurgical and export thermal coal markets and ongoing secular decline in the US thermal coal industry. Most of the company's US thermal coal is sold to domestic utilities and all the US-produced metallurgical coal is sold into the seaborne market. Most of the company's coal produced in Australia is sold into the seaborne thermal and metallurgical coal markets in Asia. Despite the diversity of the company's operations, a sharp and sustained decline in coal prices would have a meaningful impact on the company's earnings and cash flow, albeit with some lag based on contracted volumes. Like other rated coal producers, environmental and social factors have a material impact on the company's credit quality. The rating also takes into consideration that some mining assets have less favorable operating prospects in the coming years and, therefore, could be subject to more significant reclamation-related spending over the rating horizon. FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The negative outlook reflects risk associated with a weakening macroeconomic environment and upcoming debt maturities in 2022. Moody's could downgrade the rating with expectations for adjusted financial leverage above 3.5x (Debt/EBITDA), negative free cash flow in 2021, substantive deterioration in liquidity, or further intensification of ESG concerns that call into question the company's ability to handle upcoming financing requirements. Given the company's excess cash position, Moody's has tolerance for a modest increase in adjusted financial leverage beyond 3.5x on a temporary basis with a clear intent to repay debt to reduce leverage with improvement in the public health situation. Moody's could upgrade the rating with expectations for adjusted financial leverage sustained below 2.5x, meaningful reduction in absolute debt, sustained positive free cash flow, and successful refinancing of upcoming debt maturities. Environmental, social, and governance factors have a material impact on Peabody's credit quality. The company is exposed to ESG issues typical for a company in the coal mining industry, including increasing global demand for renewable energy that is detrimental to demand for coal, especially in the United States and Western Europe. From an environmental perspective the coal mining sector is also viewed as: (i) very high risk for air pollution and carbon regulations; (ii) high risk for soil and water pollution, land use restrictions, and natural and man-made hazards; and (iii) moderate risk for water shortages. Specific social issues with respect to Peabody include the future operational status of the company's North Goonyella metallurgical coal mine that is not operational following a mine fire. The company is in the process of resuming mining operations, but encountered delays with local authorities in Queensland and announced that it will pursue a commercial process for North Goonyella. Governance-related risks have increased in early 2020 following change in CFO and the company's announcement that it would nominate two directors from its largest shareholder and one independent director. Peabody also returned substantial cash to shareholders over the past three years ($1.6 billion), including an acceleration of share repurchase activity as export markets weakened in late 2019. The SGL-2 Speculative Grade Liquidity Rating reflects its expectation for good liquidity to support operations over the next 12-18 months. Peabody reported about $1.3 billion of available liquidity at December 31, 2019, including $732 million of balance sheet cash and availability under a $565 million revolving credit facility and $250 million accounts receivables securitization program. Both facilities are used to support letters of credit. Subsequent to the closing of the reporting period and in response to uncertainty related to the Coronavirus pandemic, the company drew $300 million on its revolving credit facility and holds pro forma cash in excess of $1 billion. Beyond the potential for weakened cash flow generation, the liquidity rating could be challenged by two specific scenarios: (i) potential need to obtain consent from bondholders to move forward with a proposed joint venture with Arch Coal, which will require litigation related to the deal's rejection by the US Federal Trade Commission; and (ii) a projected narrow cushion of compliance under the first lien secured leverage ratio test in the company's revolving credit facility. With a commercial process underway for the North Goonyella mine, near-term alternative sources of liquidity are potentially significant, though the amount and timing of any proceeds remains uncertain, particularly in light of substantial economic and financial disruption in early 2020. The SGL also incorporates the benefits of Peabody's diverse operations, which give the company more assets with which to pursue leasing and other liquidity-enhancing transactions like many other companies in the coal industry, and substantial unencumbered operations in Australia. Peabody Energy Corporation is a leading global pure-play coal producer with coal mining operations in the US and Australia and about 4 billion tons of proven and probable reserves. The company generated $4.6 billion in revenues in 2019. The principal methodology used in these ratings was Mining published in September 2018. PEACE INC: Seek to Hire Golan Christie as Legal Counsel ------------------------------------------------------- Peace Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the Northern District of Illinois to hire Golan Christie Taglia, LLP as their legal counsel. Golan Christie will provide services in connection with Debtors's Chapter 11 cases, which include legal advice regarding their powers and duties under the Bankruptcy Code and the preparation of a bankruptcy plan. The firm will be paid at these rates: Senior Partner $565 per hour Partner $390 to $490 per hour Associate $295 to $360 per hour Legal Assistant $175 per hour Golan Christie has required an advance payment retainer in the amount of $5,000. Golan Christie is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Robert R. Benjamin, Esq. Beverly A. Berneman, Esq. Caren A. Lederer, Esq. M. Elysia Baker, Esq. Golan Christie Taglia, LLP 70 W. Madison, Ste. 1500 Chicago, IL 60602 Phone: 312-263-2300 Fax: 312-263-0939 Email: rrbenjamin@gct.law baberneman@gct.law calederer@gct.law mebaker@gct.law About Peace Inc. Peace Inc. and its affiliates, 3860 Taxi Corp., Choice Enterprise Inc., Kimberly Taxi Co., Natzac Inc., RSA Cab Corp., Senai Taxi Corp., Siam Incorporated I and Zion Cab Incorporated, are privately held companies in the taxi and limousine service industry. The Debtors sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Lead Case No. 20-08787) on April 3, 2020. At the time of the filing, Peace Inc. disclosed $162,565 in assets and $1,111,203 in liabilities. Golan Christie Taglia, LLP is Debtors' legal counsel. PENINSULA PACIFIC: S&P Lowers ICR to 'CCC+'; Outlook Negative ------------------------------------------------------------- S&P Global Ratings lowered all ratings on Virginia-based gaming operator Peninsula Pacific Entertainment LLC, including its issuer credit rating, to 'CCC+' from 'B'. At the same time, S&P removed all of its ratings on the company from CreditWatch, where S&P placed them with negative implications on March 20, 2020. The temporary closure of its gaming facilities may pressure Peninsula Pacific's liquidity position this year. Given the temporary closure of the company's operations since mid-March, and the associated loss of cash flow, Peninsula Pacific will generate negative EBITDA and burn cash for as long as its gaming facilities remain closed. In addition, S&P believes the company's ability to lift EBITDA in the next year to a level that comfortably covers fixed charges may be challenging given its forecast for a recession this year and S&P's belief casinos will likely reopen with some social distancing measures in place that reduce available gaming capacity. The negative outlook reflects S&P's belief that a weak economic environment combined with continued social distancing measures and possible consumer fears about being in enclosed public spaces, could lead to a weak recovery once casinos reopen, and an inability for the company to build EBITDA to a level that comfortably covers fixed charges. "We could lower the ratings if it appears the company is burning cash faster than we are expecting in our base case or if operations remain closed beyond the second quarter, which could result in a cash drain and an inability to meet liquidity needs this year. We could also lower the ratings if we no longer believe Peninsula Pacific can generate a run-rate level of EBITDA that can comfortably cover fixed charges, because the impacts of the recession and social distancing measures are more severe than we are currently anticipating," S&P said. "We are unlikely to revise the outlook to stable or raise the ratings until operations reopen, and we can assess the pace of Peninsula Pacific's cash flow recovery later this year and into 2021, and its ability to rebuild cash balances that may have been depleted during the closures. We could revise the outlook to stable or raise the rating if we believe the company can generate a run-rate level of EBITDA that can comfortably cover fixed charges over the long run," S&P said. PENNSYLVANIA ECONOMIC: Fitch Cuts Ratings to 'BB' on Coronavirus ---------------------------------------------------------------- Fitch Ratings has downgraded the following parking credit: -- Pennsylvania Economic Development Financing Authority (Capital Region Parking System) from 'BB+' to 'BB'. The rating is on Rating Watch Negative. In addition, Fitch has affirmed the ratings on the following parking credits and their Rating Outlooks are Stable: -- Montgomery County, MD (Bethesda Parking Lot District) rev bonds and Issuer Default Rating at 'AA'; -- Boulder Central Area General Improvement District, CO at 'AA'; -- City of Miami, Dept. of Off-Street Parking at 'A'. RATING RATIONALE The majority of parking credits were affirmed at their current levels and have Stable Outlooks. The affirmations were broadly supported by the sector's ability to withstand a severe but time-limited revenue shock in 2020. This resilience stems from most parking entities' strong overall liquidity levels, the presence of healthy debt service reserve accounts and debt service coverage ratio cushions that support either no draws on liquidity in 2020 or the possibility of limited draws on unrestricted cash that would likely be replenished quickly. The downgrade and Negative Watch on Pennsylvania Economic Development Financing Authority (Capital Region Parking System) reflects the narrow liquidity position of the parking system, which has been further challenged by a sharp decline in parking demand caused by the coronavirus. Management outlines the possibility that draws on the Class B and Class C debt service reserve surety contracts may be necessary for the semi-annual payments due on July 1, 2020. Although the parking system maintains healthy coverage on a senior basis, coverage is significantly lower for subordinate obligations. Similar to pro forma used in its downgrade to below investment grade in October 2019, the coronavirus cases reflect all-in coverage that is below sum sufficiency in 2020 and below covenanted levels through the entirety of the forecast. Previous rating case metrics projected senior coverage of 2.6x between 2021 and 2024, while current rating case metrics reflect a lower, yet still healthy, 2.4x. Total coverage drops from an average of 1.2x to 1.1x. Previous outlooks have stated that future rating action is dependent on a demonstrated ability to generate debt service coverage metrics in excess of covenanted levels, net cash flow sufficient for asset preservation and maintenance of adequate capital reserve balances. Parking system cash flows and current fund balances remain very narrow and provide limited internal resources for maintenance capex as replenishment of the capital reserve account is low in priority in the payment waterfall. Resolution of the Negative Watch will depend on parking demand in conjunction with the system's ability to develop and maintain stronger liquidity and DSCR coverage in excess of covenanted levels while addressing long-term capital needs. KEY RATING DRIVERS No key rating drivers were changed as part of this review. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Positive rating action is not expected in the near future given substantial uncertainty in relation to the coronavirus crisis with knock-on effects on economic growth, parking demand and revenues; -- Pennsylvania Economic Development Financing Authority's Outlook may return to Stable if the system re-establishes healthy debt service coverage in excess of the 1.25x covenanted levels over successive fiscal years in conjunction with healthier system liquidity. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Material degradation of out-year parking and revenue expectations should the coronavirus crisis result in anticipated long-term economic impairment; -- Sustained deterioration of liquidity levels. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Public Finance issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. TRANSACTION SUMMARY BEST/WORST CASE RATING SCENARIO Ratings of Public Finance issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. CREDIT UPDATE The coronavirus pandemic represents a significant challenge to both the global economy and to the toll road sector. State and local governments across the U.S. have begun issuing orders for residents to self-quarantine for all but essential travel in an effort to slow the spread of the virus. These efforts to slow the spread of coronavirus have had the unintended consequence of slowing the economy and have resulted in severe traffic declines well in excess of peak losses during the global financial crisis, which was itself outsized in its severity. Fitch is in receipt of recent data showing parking declines in excess of 60% on certain large-scale systems. These declines, largely driven by shelter-in-place orders are unprecedented in size and the duration of such orders remains an uncertainty. While parking revenues have declined accordingly, and in many cases enforcement operations have been significantly reduced and, in some cases, ceased altogether, the majority of parking credits are expected to remain stable given currently healthy financial metrics and solid cash/liquidity positions. Parking operations are potentially poised for a more rapid recovery compared with other demand-based sectors. As quarantine and shelter-in-place restrictions are lifted, parking demand will increase as individuals address personal business and social activities that have been deferred. Further, personal vehicle travel will likely be a favored form of transportation over public transportation and ridesharing, as it will continue to aid in social distancing. FINANCIAL ANALYSIS FITCH CASES Fitch applied two cash flow cases to all parking credits. While Fitch does not assess parking credit quality according to the Toll Road rating criteria, the similar nature and use of the assets supports the application of rating stresses described in detail in 'Fitch Ratings Defines Coronavirus Scenarios for U.S. Toll Roads' dated March 24, 2020. These parameters translated into rating case forecast passenger vehicle revenue losses of 8%, 75%, 35% and 20% in 1Q20, 2Q20, 3Q20, and 4Q20, respectively, or an annualized loss of 34% for 2020. Revenues are assumed to recover to 2019 levels by 2021 minus 10% and grow at prior rating case rates thereafter. Variable rate O&M is assumed to fluctuate with traffic levels for the first two years and revert to prior rating case assumptions in 2022 and beyond. Fitch also ran a sensitivity cash flow case, which assumes a 2020 revenue decline consistent with that depicted in the rating case. However, the recovery will be more gradual. Under this scenario, parking revenues are modelled to yield a parking revenue figure in 2024 that is consistent with parking revenues recorded in 2019 through straight line annual growth. ESG CONSIDERATIONS No ESG ratings were changed as part of this review. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG CONSIDERATIONS ESG issues are credit neutral or have only a minimal credit impact on the entity(ies), either due to their nature or the way in which they are being managed by the entity(ies). PENSKE AUTOMOTIVE: Moody's Alters Outlook on Ba1 CFR to Negative ---------------------------------------------------------------- Moody's Investors Service affirmed all ratings of Penske Automotive Group, Inc. including the Ba1 corporate family rating. The outlook was changed to negative from stable. The SGL-2 speculative grade liquidity rating is unchanged. "The outlook change to negative considers the potential for deterioration in Penske's credit metrics due to the various coronavirus containment measures," stated Moody's Vice President Charlie O'Shea. "Heading into 2020, Penske's metrics were already weakly positioned relative to the downward rating triggers with EBIT/interest of 3.1 times already below the 3.5 times trigger, with Moody's expectation that they would gradually improve during the year, which is now uncertain," continued O'Shea. "The affirmation recognizes Penske's size, flexible auto dealer operating model, and its diversity outside of auto retail, particularly its sizeable ownership stake of Penske Truck Leasing, and highly-experienced management team," added O'Shea. Affirmations: Issuer: Penske Automotive Group, Inc. Probability of Default Rating, Affirmed Ba1-PD Corporate Family Rating, Affirmed Ba1 Senior Subordinated Regular Bond/Debenture, Affirmed Ba3 (LGD6) Outlook Actions: Issuer: Penske Automotive Group, Inc. Outlook, Changed to Negative from Stable RATINGS RATIONALE Penske's Ba1 corporate family rating considers its position as the world's largest auto dealer by revenue, with balance between its US and International divisions, its diverse business model outside of the auto retail business, especially the positive impact of its 29% ownership stake in Penske Truck Leasing, the ability to "flex" its business model for fluctuating macroeconomic conditions, which is being tested during the present coronavirus pandemic, and opportunities for future prudent growth across its numerous platforms. Ratings also consider Penske's financial strategy, which has become more balanced in recent years, particularly where shareholder distributions are concerned, and its good liquidity. The negative outlook considers the recent softening in Penske's credit metrics, with interest coverage of 3.1 times below the 3.5 times downgrade trigger at FYE 2019 and uncertainty as to a path to improvement given the inherent risks emanating from the coronvirus countermeasures. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if operating performance improves and financial strategy remains balanced such that debt/EBITDA is maintained below 3.5 times and EBIT/interest is sustained above 5 times, with liquidity remaining at least good. In addition, Penske would need to demonstrate a commitment to policies consistent with an investment grade rating. Ratings could be downgraded if liquidity were to weaken, or if either softening operating performance or a more aggressive financial strategy resulted in debt/EBITDA rising above 4.75 times or EBIT/interest sustained below 3.5 times. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. New auto sales are one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, Moody's believes Penske's new vehicle sales are vulnerable to shifts in market sentiment in these unprecedented operating conditions and Penske's level of new vehicle sales remain vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety The principal methodology used in these ratings was Retail Industry published in May 2018. Headquartered in Bloomfield Hills, MI, Penske Automotive Group is a leading global retailer and servicer of new and used vehicles, including passenger vehicles, light trucks, and commercial vehicles, and maintains a 28.9% ownership interest in Penske Truck Leasing. Annual revenues are around $21 billion. PERMIAN PRODUCTION: Moody's Withdraws B3 CFR on Data Inadequacy --------------------------------------------------------------- Moody's Investors Service withdrew Permian Production Partners, LLC's B3 Corporate Family Rating, B3-PD Probability of Default rating, B3 senior secured credit facility rating, and stable outlook. Outlook Actions: Issuer: Permian Production Partners, LLC Outlook, Changed To Rating Withdrawn From Stable Withdrawals: Issuer: Permian Production Partners, LLC Probability of Default Rating, Withdrawn, previously rated B3-PD Corporate Family Rating, Withdrawn, previously rated B3 Senior Secured Bank Credit Facility, Withdrawn, previously rated B3 (LGD3) RATINGS RATIONALE Permian Production Partners, LLC has decided to cease participation in the rating process. Moody's has decided to withdraw the ratings because of inadequate information to monitor the ratings, due to the issuer's decision to cease participation in the rating process. Permian Production Partners, LLC is headquartered in Golden, Colorado, and is a private equity backed exploration and production (E&P) company with primary operations in the Ward and Winkler Counties of the Central Basin Platform in West Texas. PFS HOLDING: Bank Debt Trades at 61% Discount --------------------------------------------- Participations in a syndicated loan under which PFS Holding Corp is a borrower were trading in the secondary market around 39 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD280 million term loan is scheduled to mature on January 31, 2021. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. PINNACLE REGIONAL: Trustee Seeks to Hire Stinson LLP as Counsel --------------------------------------------------------------- James Overcash, the Chapter 11 trustee for Pinnacle Regional Hospital, Inc. and its affiliates, seeks approval from the U.S. Bankruptcy Court for the District of Kansas to hire Stinson, LLP as his legal counsel. Stinson will provide services in connection with Debtors' Chapter 11 cases: a. advise the trustee on specific legal issues as they arise; b. advise the trustee on various motions and pleading filed by secured lenders and other parties; c. prepare legal papers and appear in court; d. represent the trustee in the potential marketing and sale of property of the estate, and assist in negotiations; e. assist the trustee in investigating Debtors' assets and pre-bankruptcy conduct; f. analyze the perfection, priority, and possible avoidance of the liens of secured creditors; and g. represent the trustee in certain proceedings in Debtors' cases. The rates range from $250 to $695 per hour for attorneys and from $175 to $295 per hour for paraprofessionals. Nicholas Zluticky, Esq., and Michael Pappas, Esq., the firm's attorneys expected to have primary responsibility for representing the trustee, charge $375 per hour and $290 per hour, respectively. Stinson is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Nicholas J. Zluticky, Esq. Stinson LLP 1201 Walnut, Suite 2900 Kansas City, MO 64106 Telephone: (816) 842-8600 Facsimile: (816) 691-3495 Email: nicholas.zluticky@stinson.com About Pinnacle Regional Hospital Pinnacle Regional Hospital, Inc. -- http://pinnacleregional.com/-- is an operator of general acute-care hospitals in Overland Park, Kansas. See http://pinnacleregional.com/ Pinnacle Regional Hospital and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Kansas Lead Case No. 20-20219) on Feb. 12, 2020. The affiliates are Pinnacle Regional Hospital LLC, Pinnacle Healthcare System Inc., Blue Valley Surgical Associates, Rojana Realty Investments Inc. and Joys' Majestic Paradise, Inc. At the time of the filing, Pinnacle Regional Hospital disclosed assets of between $10 million and $50 million and liabilities of the same range. McDowell, Rice, Smith & Buchanan, PC, is Debtors' legal counsel. The Office of the U.S. Trustee appointed a committee of unsecured creditors on March 31, 2020. The committee is represented by Kilpatrick Townsend & Stockton, LLC. On March 31, 2020, James A. Overcash, Esq., at Woods Aitken LLP, was appointed as Chapter 11 trustee. The trustee is represented by Stinson LLP and Woods Aitken LLP. PINNACLE REGIONAL: Trustee Seeks to Hire Woods Aitken as Counsel ---------------------------------------------------------------- James Overcash, the Chapter 11 trustee for Pinnacle Regional Hospital, Inc. and its affiliates, seeks approval from the U.S. Bankruptcy Court for the District of Kansas to hire his own firm as legal counsel. The trustee proposes to employ Woods Aitken, LLP to provide these services in connection with Debtors' Chapter 11 cases: a. conduct factual investigation, as necessary, to determine the extent and nature of the assets, recoverable transfers, avoidance actions, and claims; b. prepare legal documents and represent the trustee in court and appeal proceedings; and c. provide all other legal services which may be necessary in Debtors' bankruptcy proceedings. The hourly rates for the firm's attorneys range from $360 to $150. Paralegal work will be billed at $150 per hour. Woods Aitken neither holds nor represents an interest adverse to the trustee, according to court filings. The firm can be reached through: James Overcash, Esq. Woods Aitken LLP 301 South 13th Street, Suite 500 Lincoln, Nebraska 68508 Phone: (402) 437-8519 Email: jovercash@woodsaitken.com About Pinnacle Regional Hospital Pinnacle Regional Hospital, Inc. -- http://pinnacleregional.com/-- is an operator of general acute-care hospitals in Overland Park, Kansas. Pinnacle Regional Hospital and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Kansas Lead Case No. 20-20219) on Feb. 12, 2020. The affiliates are Pinnacle Regional Hospital LLC, Pinnacle Healthcare System Inc., Blue Valley Surgical Associates, Rojana Realty Investments Inc. and Joys' Majestic Paradise, Inc. At the time of the filing, Pinnacle Regional Hospital disclosed assets of between $10 million and $50 million and liabilities of the same range. McDowell, Rice, Smith & Buchanan, PC is Debtors' legal counsel. The Office of the U.S. Trustee appointed a committee of unsecured creditors on March 31, 2020. The committee is represented by Kilpatrick Townsend & Stockton, LLC. On March 31, 2020, James A. Overcash, Esq., at Woods Aitken LLP, was appointed as Chapter 11 trustee. The Trustee is represented by Stinson LLP and Woods Aitken LLP. PLAYPOWER INC: Moody's Alters Outlook on B3 CFR to Negative ----------------------------------------------------------- Moody's Investors Service affirmed PlayPower, Inc.'s ratings, including its Corporate Family Rating at B3, its Probability of Default Rating at B3-PD, and the B3 rating on the company's senior secured first lien credit facilities, including its senior secured first lien revolver due 2024 and senior secured first lien term loan due 2026. The outlook was changed to negative. Its outlook change to negative reflects Moody's view that schools and recreational/fitness facilities closures, and the weak economic outlook as a result of the coronavirus pandemic will negatively affect demand for the company's playground products at least through 2020. The uncertainty around the duration of the outbreak and pace of re-openings and rebound in economic conditions once the pandemic subsides will limit new orders and complicate production planning. The majority of the company's products are purchased by schools and local municipalities, and almost all states in the US have cancelled on-premise school instruction and school athletic events, as well as closed numerous parks and recreational/fitness facilities due to social distancing measures. In addition, Moody's expects lower tax revenue because of the sharp decline in economic activity and increased unemployment, combined with very high healthcare spending as a result of the coronavirus outbreak will pressure local municipalities and school budgets. The playground and outdoor fitness equipment industry is highly cyclical and discretionary in nature, and customers pull back purchases of playground and related equipment products during economic downturns and in periods of weaker tax revenue. Moody's affirmed PlayPower's ratings because school and park closures are not currently expected to extend into the 2020-2021 school year, which would materially affect the company's summer and fall selling seasons. PlayPower's moderate improvement in financial leverage with debt/EBITDA at around 5.4x for the last twelve months period (LTM) ended September 30, 2019, down from 5.7x for the fiscal year end period December 31, 2018, helps provide some cushion to absorb weaker operating results and credit metrics within Moody's expectations the rating. The lack of meaningful near-term maturities until its $45 revolver is due in 2024 also provides some financial flexibility. Affirmations: Issuer: PlayPower, Inc. Probability of Default Rating, Affirmed B3-PD Corporate Family Rating, Affirmed B3 Senior Secured Bank Credit Facility, Affirmed B3 (LGD4) Outlook Actions: Issuer: PlayPower, Inc. Outlook, Changed To Negative From Stable RATINGS RATIONALE PlayPower's B3 CFR reflects its relatively small scale with revenue of around $634 million and moderate financial leverage with debt/EBITDA at around 5.4x for the LTM September 30, 2019. The company has end market concentration in schools and local municipalities, and limited geographic diversity with sales concentrated in the U.S. The company's products are relatively high-cost, discretionary items, the purchase of which can be delayed during cyclical downturns and periods of weaker tax revenue. Moody's expects schools and recreational/fitness facilities closures, combined with the expectation for local municipalities and school budgets to be stressed as a result of the coronavirus pandemic, will pressure demand for the company's playground equipment at least through 2020. As a result, Moody's expects financial leverage to increase over 7.0x debt/EBITDA over the next 6-12 months. Governance factors includes the company's aggressive financial policies under private equity ownership. The rating also reflects PlayPower's strong market position in the U.S., being one of the top two commercial playground equipment manufacturers. The company's relatively good profit margins with EBITDA margin in the mid-to-high teens provides some cushion to absorb temporary periods of weak demand. PlayPower's adequate liquidity reflects its cash balance of around $29 million as of September 30, 2019, and access to its $45 million revolving facility due 2024 (undrawn at September 30, 2019), which provides limited financial flexibility to fund working capital needs over the next 12 months. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The durables sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in PlayPower's credit profile, including its exposure to schools and local municipalities, have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and the company remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on PlayPower of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The negative outlook reflects downside pressure on the company's CFR if sales materially decline as a result of prolonged schools and recreational/fitness facilities, and the uncertainty around the duration of closures and pace of re-openings once the coronavirus pandemic subsides. The negative outlook also reflects Moody's expectations for local municipalities and school budgets to be pressured because of current weak economic conditions which will negatively impact demand for the company's products. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if operating results and free cash flow generation improve driven by sustained organic revenue growth, if debt/EBITDA is sustained below 5.0x, and the company maintains at least adequate liquidity. The ratings could be downgraded if operating results deteriorate beyond Moody's expectation, debt/EBITDA is sustained above 6.5x, or if liquidity deteriorates for any reason including increasing revolver reliance. The principal methodology used in these ratings was Consumer Durables Industry published in April 2017. PlayPower, Inc. based in Huntersville, North Carolina, primarily manufactures commercial playground equipment used in parks and schools throughout North America and Europe. Commercial play products account for over 70% of revenue. PlayPower also manufactures shade structures that provide protection to people and assets from the sun and weather, commercial indoor play systems, site amenities, and marine accessories such as floating modular dock systems and watercraft lifts. The company's primary markets are North America and Europe, with some exposure to Asia and the Middle East. PlayPower generated $521 million of revenue for the LTM September 30, 2019. PlayPower was acquired in June 2015 by private equity firm Littlejohn & Co., LLC. PMHC II: Bank Debt Trades at 58% Discount ----------------------------------------- Participations in a syndicated loan under which PMHC II Inc is a borrower were trading in the secondary market around 42 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD150 million term loan is scheduled to mature on March 28, 2026. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. PRIME CELEBRATION: Seeks to Hire Eric A. Liepins as Legal Counsel ----------------------------------------------------------------- Prime Celebration, LLC, seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire Eric A. Liepins P.C. as its legal counsel. The firm will advise Debtor of its powers and duties under the Bankruptcy Code and will provide other legal services in connection with its Chapter 11 case. The firm will charge $275 per hour for its services. Liepins received a retainer of $5,000, plus the filing fee. Eric Liepins, Esq., disclosed in court filings that his firm does not represent any interest adverse to Debtor's bankruptcy estate. The firm can be reached through: Eric A. Liepins, Esq. Eric A. Liepins, P.C. 12770 Coit Road, Suite 1100 Dallas, TX 75251 Telephone: (972) 991-5591 Telefax: (972) 991-5788 Email: eric@ealpc.com About Prime Celebration Prime Celebration, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 20-31113) on April 6, 2020. At the time of the filing, Debtor was estimated to have assets of between $500,001 and $1 million and liabilities of the same range. Eric A. Liepins, P.C. is Debtor's legal counsel. PUBLIC BIKES: Seeks to Hire Banchero Law Firm as Special Counsel ---------------------------------------------------------------- Public Bikes, Inc., seeks approval from the U.S. Bankruptcy Court for the Northern District of California to hire Banchero Law Firm LLP as its special counsel. The services to be provided by the firm include: a. the negotiation, litigation and resolution of the allowed amount of claim asserted by Debtor's landlord, 547-551 Hayes LLC; b. the negotiation, litigation and resolution of any issues which may arise under Debtor's asset purchase agreement and intellectual property license agreement with BikeSmart; c. providing access to Debtor's documents necessary to prepare a plan of reorganization; and d. legal representation in other matters. The firm will be paid at these rates: E. Jeffrey Banchero $645 per hour Mary Bryan Banchero $395 per hour Banchero neither neither holds nor represents any interest adverse to Debtor and its bankruptcy estate, according to court filings. The firm can be reached through: E. Jeffrey Banchero, Esq. Banchero Law Firm LLP 601 California Street, Suite 1300 San Francisco, CA 94108 Tel: 415-398-7000 / 415-955-9101 Email: ejb@bancherolaw.com About Public Bikes Public Bikes, Inc., a lessor of non-financial intangible assets (except copyrighted works), sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 20-30310) on March 31, 2020. At the time of the filing, Debtor had estimated assets of between $100,000 and $500,000 and liabilities of between $1 million and $10 million. Judge Dennis Montali oversees the case. St. James Law, P.C. is Debtor's legal counsel. PUBLIC BIKES: Seeks to Hire St. James Law as Legal Counsel ---------------------------------------------------------- Public Bikes, Inc., seeks approval from the U.S. Bankruptcy Court for the Northern District of California to hire St. James Law, P.C. as its legal counsel. St. James Law will provide services in connection with Debtor's Chapter 11 case, which include the evaluation of claims filed by its creditors and the preparation and implementation of a Chapter 11 plan of reorganization. Michael St. James, Esq., the firm's attorney who will be handling the case, charges an hourly fee of $650. The firm received a pre-payment deposit or retainer of $11,717, of which $7,299.95 was applied to pre-bankruptcy services and the filing fee, leaving a net retainer of $4,417.05 as of March 31, 2020. St. James Law neither holds nor represents any interest adverse to Debtor, according to court filings. The firm can be reached through: Michael St. James, Esq. St. James Law, P.C. 22 Battery Street, Suite 888 San Francisco, CA 94111 Tel: (415)391-7566 Fax: (415)391-7568 E-mail: michael@stjames-law.com About Public Bikes Inc. Public Bikes, Inc., a lessor of non-financial intangible assets (except copyrighted works), sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 20-30310) on March 31, 2020. At the time of the filing, Debtor had estimated assets of between $100,000 and $500,000 and liabilities of between $1 million and $10 million. Judge Dennis Montali oversees the case. St. James Law, P.C. is Debtor's legal counsel. PULMATRIX INC: Michael Higgins Succeeds Mark Iwicki as Chairman --------------------------------------------------------------- Michael J. Higgins, a current member of the Board of Directors of Pulmatrix, Inc., succeeded Mark Iwicki as chairman of the Board, effective April 21, 2020. Mr. Iwicki will continue to serve as a member of the Board. In connection with his appointment as chairman, Mr. Higgins received an option grant of 15,000 shares, at $1.28 per share. Reclassification of Board of Directors On April 22, 2020, the Board completed a process to reassign the class of a member of the Board so that each class would have an equal size. Solely to effect this change, Richard Batycky, Ph.D. resigned as a Class I director of the Company, effective as of April 22, 2020, and was immediately reappointed by the Board as a Class II director of the Company by the remaining members of the Board, to serve in such capacity until the next annual meeting of stockholders at which the term of the Class II directors expires or until his successor is duly elected and qualified, or his earlier death, resignation or removal. As Dr. Batycky's resignation and reappointment were effected solely to maintain the size of each class as nearly equal in number as possible, his service on the Board is deemed to have continued uninterrupted without any break in service. Dr. Batycky will continue to serve on the Board's Audit and Compensation Committees. About Pulmatrix Pulmatrix, Inc. -- http://www.pulmatrix.com-- is a clinical stage biopharmaceutical company developing innovative inhaled therapies to address serious pulmonary and non-pulmonary disease using its patented iSPERSE technology. The Company's proprietary product pipeline is initially focused on advancing treatments for serious lung diseases, including Pulmazole, an inhaled anti-fungal for patients with ABPA, and PUR1800, a narrow spectrum kinase inhibitor in lung cancer. Pulmatrix's product candidates are based on iSPERSE, its proprietary engineered dry powder delivery platform, which seeks to improve therapeutic delivery to the lungs by achieving optimal local drug concentrations and reducing systemic side effects to improve patient outcomes. Pulmatrix reported a net loss of $20.59 million for the year ended Dec. 31, 2019, compared to a net loss of $20.56 million for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $36.10 million in total assets, $25.08 million in total liabilities, and $11.02 million in total stockholders' equity. PURE FISHING: Moody's Cuts CFR to Caa2 & Alters Outlook to Stable ----------------------------------------------------------------- Moody's Investors Service downgraded SP PF Buyer LLC's (dba Pure Fishing) Corporate Family Rating to Caa2 from B3, its Probability of Default Rating to Caa2-PD from B3-PD, and the company's senior secured first lien term loan rating to Caa2 from B2. The outlook was changed to stable from negative. Its ratings downgrades reflect the company's unsustainable capital structure with excessive financial leverage with debt/EBITDA in excess of 9.0x and negative free cash flow generation for the fiscal year end December 31, 2019, and Moody's expectations that the deteriorating operating environment stemming from the coronavirus outbreak will also pressure the company's earnings and cash flows in fiscal 2020. The company's liquidity is weak and it is dependent on the revolving credit facility for fixed charges. Pure Fishing's revenue declined about ~6% and EBITDA margins contracted around 130 basis points in fiscal 2019, largely driven by poor weather conditions in some key markets in early 2019, and reduced sales to some of the company's largest customers as retailers reduced inventory levels. Given the anticipated decline in the company's earnings, Moody's projects debt/EBITDA financial leverage will increase to over 13.0x and for free cash flow to continue to be pressured in fiscal 2020. The stable outlook reflects the company's lack of near-term maturities until its revolver facility is due in 2024, other than small loan amortization, and the company has some time to execute a turnaround. However, a material improvement in credit metrics and free cash flow over the next 24 months is needed ahead of the 2024 maturity. Downgrades: Issuer: SP PF Buyer LLC Probability of Default Rating, Downgraded to Caa2-PD from B3-PD Corporate Family Rating, Downgraded to Caa2 from B3 Senior Secured Bank Credit Facility, Downgraded to Caa2 (LGD3) from B2 (LGD3) Outlook Actions: Issuer: SP PF Buyer LLC Outlook, Changed To Stable From Negative RATINGS RATIONALE Pure Fishing's Caa2 CFR reflects its unsustainable capital structure with very high financial leverage which Moody's projects will increase to over 13.0x in fiscal 2020, and its negative free cash flow generation. The company's scale is moderate with annual revenues of around $500 million, and Moody's expects the deteriorating operating environment related to the coronavirus outbreak will continue to pressure the company's top line, earnings and cash flows in fiscal 2020. The company's products are concentrated within the mature fishing product category. The company's weak liquidity reflects Moody's expectations for negative free cash flow over the next 12 months, and increased reliance on its $125 million revolving facility due in 2024. Governance factors relate to the company's ownership by private equity sponsor and the inherent risk of aggressive financial policies. The rating also reflects the company's strong market presence in the fishing products industry, its product diversification within fishing gear, and its portfolio of long-standing well recognized brands among fishing enthusiasts. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The durables sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer and business demand and sentiment. More specifically, the weaknesses in Pure Fishing's credit profile, including its exposure to weak economic conditions and high unemployment, have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and the company remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Pure Fishing of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company's operating results and free cash flow generation improve driven by sustained organic revenue growth and EBITDA margin expansion, if debt/EBITDA is sustained below 9.0x and the company maintains at least adequate liquidity. The ratings could be downgraded if the company's operating results deteriorate beyond Moody's expectations, or if the probability of a debt restructuring or event of default increases for any reason. Headquartered in Columbia, South Carolina, Pure Fishing primarily designs, manufactures and sells fishing equipment, including rods, reels, lures, artificial bait, and related fishing tackle, across the globe. Revenues approximate $500 million. PYXUS INT'L: Moody's Cuts Corp. Family Rating to Ca, Outlook Stable ------------------------------------------------------------------- Moody's Investors Service downgraded Pyxus International, Inc.'s Corporate Family Rating to Ca from Caa2 and its Probability of Default Rating to Ca-PD from Caa2-PD. Moody's downgraded the company's ABL revolving credit Facility to B2 from Ba3. Additionally, Moody's downgraded the company's first lien notes to Caa2 from B2 and second lien notes to C from Ca. Pyxus' Speculative Grade Liquidity Rating remains at SGL-4. The rating outlook on all ratings was changed to stable from negative. The downgrade reflects the company's continued weakening liquidity position, delay in refinancing its maturities and with monetizing a portion of its FIGR business (cannabis), proceeds of which were expected to repay debt. Additionally, the global coronavirus outbreak and subsequent disruption to Pyxus' business to obtain and process tobacco leaf has resulted in materially weaker operating performance and significant negative free cash flows, placing additional pressure on its business. Moody's now expects liquidity to be constrained and debt/EBITDA to exceed 15 times, making it increasingly difficult for the company to support its capital structure. Moreover, the downgrade of the first and second lien notes also considers the high potential for a distressed exchange to materially lower recovery. Moody's downgraded the following ratings: - Corporate Family Rating to Ca from Caa2; - Probability of Default Rating to Ca-PD from Caa2-PD; - Senior Secured Second lien notes due 2021 to C (LGD5) from Ca (LGD5); - Senior Secured ABL revolving credit facility due 2021 to B2 (LGD2) from Ba3 (LGD2); - Senior Secured First lien notes due 2021 to Caa2 (LGD2) from B2 (LGD2); The outlook was changed to stable from negative. RATINGS RATIONALE Pyxus' Ca CFR reflects the company's very weak liquidity, challenging operating metrics; very high financial leverage and potential for a debt restructuring. The company operates in a mature and low-margin leaf business that is challenged by the declining volume of cigarette sales. The global outbreak of coronavirus has placed additional pressure on its business. The rating is further constrained by the company's heavy reliance on uncommitted financing, access to which could be impaired as Pyxus' credit quality weakens. The company benefits from its position as one of two major leaf tobacco merchants, its established relationships with key cigarette manufacturers, its global procurement and processing network, and investment in the growing cannabis sector. The stable outlook reflects that the ratings capture Moody's current expectations for default and recovery. ESG considerations include high social risks associated with the negative health impact of cigarettes and expansion into cannabis. The company's financial policy reflects high governance risks given its very aggressive financial policy. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be downgraded further if Pyxus liquidity further deteriorates, or if a restructuring provides lower recoveries than currently anticipated. Given the company's high financial leverage and weak operating performance, an upgrade is not likely in the next year. In order to warrant an upgrade, the company needs to materially improve its operating performance, strengthen its liquidity position, refinance its debt maturities and materially reduce financial leverage. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The protein and agriculture sector has been somewhat affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Pyxus' credit profile have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Pyxus remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Pyxus of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Pyxus, Headquartered in Morrisville, North Carolina, is a leaf tobacco merchant. Its principal products include flue-cured, burley and oriental tobaccos, which are major ingredients in cigarettes. Annual revenue totaled approximate $1.6 billion for the last twelve months ending December 2019. The principal methodology used in these ratings was Protein and Agriculture published in May 2019. RECESS HOLDINGS: Bank Debt Trades at 18% Discount ------------------------------------------------- Participations in a syndicated loan under which Recess Holdings Inc is a borrower were trading in the secondary market around 82 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD370 million term loan is scheduled to mature on September 29, 2024. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. RECESS HOLDINGS: Moody's Alters Outlook on B3 CFR to Negative ------------------------------------------------------------- Moody's Investors Service affirmed Recess Holdings, Inc.'s ratings, including its Corporate Family Rating at B3, its Probability of Default Rating at B3-PD, the rating on the company's senior secured first lien term loan due 2024 at B2, and the rating on its senior secured second lien term loan due 2025 at Caa2. The outlook was changed to negative. Its outlook change to negative reflects Moody's view that schools and recreational/fitness facilities closures, and the weak economic outlook as a result of the coronavirus pandemic will affect negatively demand for the company's playground products at least through 2020. The uncertainty around the duration of the outbreak and pace of re-openings and rebound in economic conditions once the pandemic subsides will limit new orders and complicate production planning. The majority of the company's products are purchased by schools and local municipalities, and almost all states in the US have cancelled on-premise school instruction and school athletic events, as well as closed numerous parks and recreational/fitness facilities due to social distancing measures. In addition, Moody's expects lower tax revenue because of the sharp decline in economic activity and increased unemployment, combined with very high healthcare spending as a result of the coronavirus outbreak will pressure local municipalities and school budgets. The playground and outdoor fitness equipment industry is highly cyclical and discretionary in nature, and customers pull back purchases of playground and related equipment products during economic downturns and in periods of weaker tax revenue. Moody's affirmed Recess' ratings because school and park closures are not currently expected to extend into the 2020-2021 school year, which would materially affect the company's summer and fall selling seasons. Recess' moderate improvement in financial leverage with debt/EBITDA at around 5.5x for the fiscal year end December 31, 2019, down from 6.0x for the same period a year ago, provides some cushion to absorb weaker operating results and credit metrics within Moody's expectations for the rating. The lack of meaningful near-term maturities until its $105 revolver is due in 2023 also provides some financial flexibility. Affirmations: Issuer: Recess Holdings, Inc. Probability of Default Rating, Affirmed B3-PD Corporate Family Rating, Affirmed B3 Senior Secured 1st Lien Bank Credit Facility, Affirmed B2 (LGD3) Senior Secured 2nd Lien Bank Credit Facility, Affirmed Caa2 (LGD5) Outlook Actions: Issuer: Recess Holdings, Inc. Outlook, Changed To Negative From Stable RATINGS RATIONALE Recess' B3 CFR reflects its relatively small scale with revenue of around $634 million and moderate financial leverage with debt/EBITDA at around 5.5x for the fiscal year end period December 31, 2019. The company has end market concentration in schools and local municipalities, and limited geographic diversity with sales concentrated in the U.S. The company's products are relatively high-cost, discretionary items, the purchase of which can be delayed during cyclical downturns and periods of weaker tax revenue. Moody's expects schools and recreational/fitness facilities closures, combined with the expectation for local municipalities and school budgets to be stressed as a result of the coronavirus pandemic will pressure demand for the company's playground equipment at least through 2020. As a result, Moody's expects financial leverage to increase over 7.0x debt/EBITDA over the next 6-12 months. Governance factors includes the company's aggressive acquisition strategy under private equity ownership. The rating also reflects Recess' strong market position in the U.S., being one of the top two commercial playground equipment manufacturers. The company's relatively good profit margins with EBITDA margin in the mid-to-high teens provides some cushion to absorb temporary periods of weak demand. Recess' good liquidity reflects its cash balance of around $54 million as of December 31, 2019, and access to its $105 million asset-based lending revolving facility (ABL) due 2024 (undrawn at December 31, 2019), which provides financial flexibility to fund working capital needs over the next 12 months. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The durables sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Recess' credit profile, including its exposure to schools and local municipalities, have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and the company remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Recess of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The negative outlook reflects downside pressure on the company's CFR if sales materially decline as a result of prolonged schools and recreational/fitness facilities, and the uncertainty around the duration of closures and pace of re-openings once the coronavirus pandemic subsides. The negative outlook also reflects Moody's expectations for local municipalities and school budgets to be pressured because of current weak economic conditions which will negatively impact demand for the company's products. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if operating results and free cash flow generation improve driven by sustained organic revenue growth, if debt/EBITDA is sustained below 5.0x, and the company maintains at least adequate liquidity. The ratings could be downgraded if operating results deteriorate beyond Moody's expectations, debt/EBITDA sustained above 6.5x, or if liquidity deteriorates for any reason including increasing revolver reliance. The principal methodology used in these ratings was Consumer Durables Industry published in April 2017. Headquartered in Chattanooga, TN, Recess manufactures commercial playground equipment, adult outdoor fitness equipment, bleachers, grandstands, playground surfacing, shade products, and outdoor site amenities such as benches, tables, and waste receptacles. It also sells a variety of products including swimming pool hand rails, life guard chairs, bike racks, and exercise equipment. The company generated revenues of around $634 million for the fiscal year end period December 31, 2019. Recess is owned by private equity firm Court Square Capital Partners. RESOLUTE FOREST: Moody's Lowers CFR to B1 & Alters Outlook to Neg. ------------------------------------------------------------------ Moody's Investors Service downgraded Resolute Forest Products Inc.'s corporate family rating to B1 from Ba3, probability of default rating to B1-PD from Ba3-PD, senior unsecured bond rating to B2 from B1 and speculative grade liquidity rating to SGL-2 from SGL-1. The rating outlook was changed to negative from stable. "The rating action reflects weaker than anticipated financial performance and the potential that Resolute's high leverage will remain elevated over the next year with the accelerated decline in paper demand and expectations that lumber and pulp markets will remain challenged for longer than previously envisaged," said Ed Sustar, Senior Vice President with Moody's. Downgrades: Issuer: Resolute Forest Products Inc. Corporate Family Rating, Downgraded to B1 from Ba3 Probability of Default Rating, Downgraded to B1-PD from Ba3-PD Speculative Grade Liquidity Rating, Downgraded to SGL-2 from SGL-1 Senior Unsecured Regular Bond/Debenture, Downgraded to B2 (LGD4) from B1 (LGD4) Outlook Actions: Issuer: Resolute Forest Products Inc. Outlook, Changed To Negative From Stable RATINGS RATIONALE Resolute's B1 CFR rating is constrained by: (1) its high leverage coming into 2020 that will remain elevated through the year (Debt/EBITDA of 13x in 2019, after lumber export duties and including the company's large unfunded pension liabilities and other Moody's adjustments); (2) the inherent price volatility of its products (most are currently well below normalized levels); and (3) the company's significant exposure to the secular decline of newsprint and specialty papers, which represents almost 50% of its revenue. Resolute benefits from: (1) end-market and product diversity through paper (with 11 newsprint and specialty paper mills), lumber (16 sawmills following the recent acquisition of three sawmills from Conifex Timber Inc, plus three other wood product facilities), commodity pulp (five pulp mills), and tissue (three tissue facilities); (2) integrated North American operations; (3) a growing tissue business; and (4) good liquidity. Resolute's 2019 leverage of 13x was 9x before lumber export duties. Moody's expects these duties ($162 million paid through December 2019) will likely be largely refunded, as they have been in the past, if and when a new softwood lumber agreement is reached between Canada and the US. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The paper and forest product industry are affected by this shock given its sensitivity to consumer demand and sentiment. However, in most jurisdictions, the paper and forest products industry has been deemed an essential service. This designation allows Resolute to continue to supply products used in the food and beverage industry, infrastructure and construction projects as well as the manufacture of fiber-based personal hygiene products such as tissue products, breathing masks and medical gowns. Nonetheless, the impact on Resolute's credit profile could leave it vulnerable to shifts in market sentiment in these unprecedented operating conditions as the outbreak continues to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Resolute of the breadth and severity of the shock, the broad deterioration in credit quality it has triggered, and high-level lingering uncertainty. Resolute has good liquidity (SGL-2), with about $400 million of sources (pro forma for the Feb 2020 acquisition of three sawmills from Conifex for $175 million) to cover $30 million of uses over the next four quarters. The company's sources of liquidity include $3 million of cash (December 2019) and combined availability of $400 million under its $500 million asset-based revolving credit facility (ABL) that matures in May 2024 and its $180 million secured revolving credit facility that matures October 2025 (net of borrowing base and springing covenant restrictions, drawings and letter of credit use). Moody's expects that Resolute will consume about $30 million of cash over the next four quarters including about $125 million of required pension contributions and $60 million of lumber export duties. Resolute does not have any significant debt maturities until May 2023. The negative outlook reflects its expectation that leverage will remain high and could remain elevated in 2021 if lumber and pulp prices do not return towards normalized levels (partially offset by Resolute's growing tissue business). The expected weakness in commodity markets could further constrain the company's cash flow and liquidity position. As a manufacturing company, Resolute is exposed to environmental risks, such as air and water emissions, and social risks, such as labor relations, health and safety issues, and changing consumer trends (which includes the accelerated preference for digital alternatives such as electronic readers instead of newspapers). The company has established expertise in complying with these on-going risks, and has incorporated procedures to address them in their operational planning and business models. Governance risks are moderate, as Resolute is a public company with transparent reporting. Although Resolute does not have a public leverage target, Moody's expects that the company will direct most of their free cash flow, when generated, towards debt reduction, as current leverage is significantly above the company's normal levels. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade - The company improves its diversification such that most of its EBITDA is generated by products other than newsprint and specialty papers (currently about 60%) - Adjusted debt/EBITDA declines below 4.5x (13x as of December 2019) based on its forward opinion of sustainable metrics - (RCF-capex)/adjusted debt above 5% (-0.5% as of December 2019) based on its forward opinion of sustainable metrics Factors that could lead to a downgrade - Sustained deterioration in the company's operating environment or liquidity - Adjusted debt/EBITDA is sustained above 5.5x (13x as of December 2019) based on its forward opinion of leverage - Free cash flow generation expected to remain negative for a sustained period of time The B2 rating on the company's $375 million senior unsecured notes is a notch below the CFR, reflecting the note holders' subordinate position behind the secured $500 million asset-based revolving credit facility (unrated) and $380 million of senior secured credit facilities (unrated). The principal methodology used in these ratings was Paper and Forest Products Industry published in October 2018. Headquartered in Montreal (Quebec, Canada), Resolute produces newsprint, specialty paper (mainly mechanical grades of paper), market pulp, lumber and tissue. Net sales for the last twelve months ending December 2019 were $3 billion. RESTAURANT TECHNOLOGIES: Moody's Alters Outlook on B2 CFR to Neg. ----------------------------------------------------------------- Moody's Investors Service affirmed Restaurant Technologies, Inc.' ratings including its Corporate Family Rating at B2, and its Probability of Default Rating at B2-PD. Moody's also affirmed the ratings on the company's senior secured first lien credit facilities at B1, including its $60 million senior secured first lien revolver due 2023 and $400 million senior secured first lien term loan due 2025, and the rating on its $100 million senior secured second lien term loan due 2026 at Caa1. The outlook was changed to negative from stable. The outlook change to negative reflects the company's high financial leverage amid restaurant closures and reduced operations as a response to the coronavirus pandemic, and the uncertainty around the duration of the outbreak and pace of re-openings and volume recovery once the pandemic subsides. Almost all US states have canceled on-premise dining resulting in restaurant closures and reduced traffic in restaurants that remain open, which will negatively impact oil volumes at least through the current coronavirus outbreak. Given the anticipated decline in sales and earnings, Moody's expects financial leverage to increase above 7.0x debt/EBITDA over the next 6-12 months, and for free cash flow generation to weaken in fiscal 2020. Moody's affirmed Restaurant Technologies' ratings because the company continues to generate material revenue from QSRs (quick service restaurants) and retail/grocery customers, which remain open and are experiencing lower oil volume declines than other foodservice customers. The company's significant recurring revenue stream from oil delivery and service fees also helps support earnings during temporary restaurant closures, and Moody's expects the company will reduce costs including labor utilization in response to lower volumes. A resumption of on-premise dining and increased restaurant traffic would provide the company an ability to reduce leverage and debt taken on to cover the cash burn experienced during restaurant closures. Affirmations: Issuer: Restaurant Technologies, Inc. Probability of Default Rating, Affirmed B2-PD Corporate Family Rating, Affirmed B2 Senior Secured First Lien Bank Credit Facility (Revolver and Term Loan), Affirmed B1 (LGD3) Senior Secured Second Lien Bank Credit Facility Term Loan, Affirmed Caa1 (LGD6) Outlook Actions: Issuer: Restaurant Technologies, Inc. Outlook, Changed To Negative From Stable RATINGS RATIONALE Restaurant Technologies' B2 CFR reflects its relatively small scale with annual revenue under $500 million (net revenue of around $209 million excluding oil passthrough), and its high financial leverage with debt/EBITDA at around 6.8x for the twelve months period ending September 30, 2019 and pro forma for the annual impact of new installations. The credit profile benefits from signed customer backlog, and customer pricing increases expected to be realized over the next twelve months. Moody's expects that restaurant closures and reduced operations as a result of the coronavirus pandemic will negatively impact oil volumes at least through the current outbreak, resulting in debt/EBITDA increasing to above 7.0x over the next 6-12 months. The company has end market concentration in the foodservice/restaurant sector, high customer concentration with McDonald's, and some commodity exposure related to sales of used cooking oil. The company's adequate liquidity reflects Moody's expectations for limited free cash flows over the next 12-18 months because of significant interest expense burden and substantial capital expenditures associated with new customer installations. Governance factors include the company's aggressive financial policies under private equity ownership, highlighted by high financial leverage. The rating also reflects Restaurant Technologies' leading market position in the closed-loop oil solutions industry, its deep entrenchment in customers' cooking oil supply chains, the high proportion of recurring revenue driven by delivery and service fees embedded in customer contracts, and its high customer retention rates. The company benefits from its first mover advantage in the market in conjunction with its healthy geographic footprint servicing most major metropolitan areas. Moody's expects the healthy backlog of new customer installations, and the continued ramp up of the company's AutoMist product, will support revenues and earnings over the next 12-18 months. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The foodservice sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Restaurant Technologies' credit profile, including its exposure to foodservice/restaurants, have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and the company remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Restaurant Technologies of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The negative outlook reflects the company's high financial leverage and further downside pressure on the CFR if sales materially decline as a result of prolonged restaurant closures, or reduced restaurant operations. The negative outlook also reflects the uncertainty around the duration of social distancing measures and the pace of re-openings and volume recovery once the coronavirus pandemic subsides. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if the company grows its revenue scale, sustains debt/EBITDA below 5.5x, and sustains EBITA/interest above 2.0x. A ratings upgrade would also require good liquidity highlighted by consistent positive free cash flow generation. Ratings could be downgraded if operating performance deteriorates beyond Moody's expectations, if debt/EBITDA is sustained above 7.0x, or EBITA/interest is below 1.0x, or if liquidity weakens for any reason, including higher reliance on revolver borrowings. Headquartered in Mendota Heights, Minnesota, Restaurant Technologies, Inc. operates as a closed-loop cooking oil distributor for quick service and casual dining restaurants, grocery stores, and hospitality customers. The company was acquired in 2018 by private equity firm West Street Infrastructure Partners (Sponsor). The company is private and does not publicly disclose its financials. Restaurant Technologies, Inc. generated net revenue of $209 million, excluding oil passthrough, for the twelve-month period ended September 30, 2019. REVLON CONSUMER: Bank Debt Trades at 50% Discount ------------------------------------------------- Participations in a syndicated loan under which Revlon Consumer Products Corp is a borrower were trading in the secondary market around 50 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The US$200 million term loan is scheduled to mature on August 6, 2023. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. REVLON CONSUMER: Bank Debt Trades at 50% Discount ------------------------------------------------- Participations in a syndicated loan under which Revlon Consumer Products Corp is a borrower were trading in the secondary market around 50 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The US$200 million term loan is scheduled to mature on August 6, 2023. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. SALLY HOLDINGS: Moody's Rates New Senior Secured Notes 'Ba2' ------------------------------------------------------------ Moody's Investors Service assigned a Ba2 rating to Sally Holdings LLC's new proposed senior secured notes. Moody's also affirmed the company's Ba2 corporate family rating and its Ba2-PD probability of default rating. The Ba1 senior secured term loan rating and Ba3 senior unsecured notes rating were also affirmed. The outlook remains negative and there is no change to the company's speculative grade liquidity rating of SGL-2. "Moody's expects the notable drag on revenue and profitability from the company's temporary store closures due to the COVID-19 outbreak and the likely economic slowdown through the rest of the year will weaken Sally's credit profile", Moody's Vice President Mickey Chadha stated. "The negative outlook acknowledges the risk that Sally's credit profile may not fully recover given the considerable uncertainty around the duration of store closures and pace of rebound in consumer demand once the pandemic begins to subside", Chadha further stated. The affirmation of the Ba2 CFR acknowledges the strength of Sally's credit metrics prior to the store closures, its somewhat less discretionary product concentration in hair care products and overall good liquidity. Moody's estimates Sally Beauty's cash on hand including sizable revolver borrowings and proceeds from the new note issuance will provide it with the ability to withstand the near-term cash flow pressures while its stores are closed. Assignments: Issuer: Sally Holdings LLC Senior Secured 2nd Lien Regular Bond/Debenture, Assigned Ba2 (LGD4) Affirmations: Issuer: Sally Holdings LLC Probability of Default Rating, Affirmed Ba2-PD Corporate Family Rating, Affirmed Ba2 Senior Secured 1st l Lien Bank Credit Facility, Affirmed Ba1 (LGD3) Senior Unsecured Regular Bond/Debenture, Affirmed Ba3 (LGD5) Outlook Actions: Issuer: Sally Holdings LLC Outlook, Remains Negative RATINGS RATIONALE Sally's Ba2 Corporate Family Rating reflects its solid market position, in terms of units, in the professional beauty supply market, typically steady performance through economic cycles, geographic diversity, and strong merchandising focus which has historically benefitted the company's margins. Prior to the COVID-19 crisis, credit metrics were solid, with lease adjusted debt/EBITDAR of about 2.8 times and EBIT/Interest of 3.5 times for the latest twelve months ended March 31, 2020. However, Moody's expects credit metrics to deteriorate significantly due to temporary store closures. Sally's stores are currently slated to remain closed until April 9 but there is a high probability the closures will continue beyond that. The weaker consumer due to lost wages and the economic slowdown is also expected to negatively impact sales even after the pandemic subsides. Therefore, Moody's expect the company's leverage to remain elevated for fiscal 2020. Sally's governance is a key credit factor as the company has taken proactive steps to address the strain on liquidity that the store closures and overall lower demand has caused. The company has drawn $395 million under its revolver and has suspended share repurchases indefinitely. The company is also cutting costs where possible including lowering capex and reducing inventory flows. The salary of the CEO and the Board members has been cut by 50% for the duration of the COVID-19 crisis. Therefore, Sally's liquidity is expected to remain good supported by its expectation that operating cash flow and cash on hand will be sufficient to cover near term cash deficits, working capital and investment spending. There are no near-term maturities with the earliest being the ABL revolving credit facility in July 2022. The rating is constrained by recent challenging sales trends, high debt load and continued need to execute its business transformation and debt reduction plans. The negative outlook reflects uncertainty around the duration of unit closures, liquidity, and pace of rebound in consumer demand once the pandemic begins to subside. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The Non-food retail sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Sally's credit profile, including its exposure to widespread store closures have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Sally remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Sally of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded with consistent revenue growth and margin expansion, increased global scale including improving the positioning of its e-commerce business, and willingness to maintain adjusted debt to EBITDA around 3.5 times and retained cash flow-to-net debt above 20%. Ratings could be downgraded if operating performance were to sustainably weaken, financial policies were to become more aggressive, or the Company were unable to maintain at least good liquidity. Specific metrics include adjusted debt to EBITDA sustained near 5.0 times, adjusted interest coverage below 2.75 times and retained cash flow-to-net debt below 12.5%. The principal methodology used in these ratings was Retail Industry published in May 2018. Sally Beauty Holdings, Inc. is an international specialty retailer and distributor of professional beauty supplies with revenues of approximately $3.9 billion annually. Through the Sally Beauty Supply and Beauty Systems Group businesses, the Company sells and distributes through 5,072 stores, including 157 franchised units, and has operations throughout the United States, Puerto Rico, Canada, Mexico, Chile, Peru, the United Kingdom, Ireland, Belgium, France, the Netherlands, Spain and Germany. SAVAGE ENTERPRISES: Moody's Alters Outlook on B1 CFR to Negative ---------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Savage Enterprises, LLC, including the B1 corporate family rating, B1 senior secured rating and B1-PD probability of default rating, and changed the outlook to negative from positive. Savage is the principal operating subsidiary of the Savage Companies. The negative outlook reflects Moody's expectation of weakening conditions in the end-markets and more broadly in the macro environment, which will be heightened by the coronavirus crisis, and a transitioning business model yet to demonstrate its resilience in such an uncertain environment. The rapid and widening spread of the coronavirus outbreak, the deteriorating global economic outlook, low oil prices and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. As Savage is exposed to the transportation sector, commodity and energy markets (including refining and oilfield services), it is exposed to shifts in market sentiment in these unprecedented operating conditions, and the company remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action on Savage reflects these considerations, the lingering uncertainty of the coronavirus pandemic and the deterioration in credit quality these factors are likely to trigger. RATINGS RATIONALE The ratings, including the B1 CFR, reflect Savage's exposure to competitive and cyclical markets facing headwinds from trade pressures, the broad economic downturn in 2020, and markets likely to be weak into 2021. As well, Moody's views Savage as a company in transition. The ratings consider the company's progress integrating the grain business, a transformational acquisition in late 2018 that was outside Savage's legacy of material handling and logistics and represents about two-thirds of revenue. The agribusiness exposes Savage to volume risk from fluctuations in grain demand as its activities include the storage and sale of grain, and to cross-border risk with a majority of its shipments destined for Mexico. The company minimizes commodity pricing risk through hedging activities. The recent sale of the marine business further reflects the changing nature of the company. It follows other business divestitures over the past year and will reduce the Savage's revenue scale and EBITDA, lowering near term free cash flow prospects. Savage is also exposed to the pressured energy end markets as sector expenditures are cut back, particularly the shale and oil field customers, although a sizeable portion of Savage's energy and chemical business is under fixed fee contract. Savage does have relatively large scale and a long history as a partner in the supply and distribution chains of its blue chip customer base. The company also has demonstrated a good track record of term debt reduction and is not expected to operate with excessive financial leverage, as Moody's anticipates debt-to-EBITDA to remain below 5x (all metrics after Moody's standard adjustments). Moody's expects the company to have adequate liquidity over the next year, including some positive free cash flow and adequate availability under its $400 million ABL revolver, although cash is relatively modest. The availability of $165 million is suppressed by a borrowing base of about $265 million that will vary with the level of eligible assets, including grain inventories, and the seasonal nature of its business. Savage is family-owned and controlled. Moody's views the company's strategy as evolving, given its limited history of operating with the agribusiness, its foray into construction/infrastructure projects and the potential for further business divestitures, likely to reduce exposure to oilfield sector volatility. Additional investments are also probable. The B1 senior secured rating is the same as the CFR, in that the substantial portion of Savage's liabilities are secured. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded with weakening operating performance such that Moody's expects deteriorating liquidity, including a material decline in the free cash flow profile or increased reliance on revolver borrowings. Downward ratings momentum could also develop if the company is unable to sustain debt-to-EBITDA around Moody's expectations of below 5x, or does not continue with the plan to reduce debt and leverage over the longer term. A more aggressive financial policy or continued investments into non-traditional business areas could also drive downward ratings pressure. The ratings are unlikely to be upgraded until the demand environment broadly improves along with business conditions. Over time, the ratings could be upgraded with demonstrated reduction in cyclicality and sustainably stronger credit metrics, including operating margins consistent with higher rated peers, expectations of debt-to-EBITDA to be sustained below 3.5x and free cash flow-to-debt in excess of 10%. This would be accompanied by higher cash balances or greater external funding availability. Savage would also need to profitably grow revenue and successfully manage the transition to primarily agribusiness while reducing debt leverage. Moody's took the following actions on Savage Enterprises, LLC: Corporate Family Rating, Affirmed at B1 Probability of Default Rating, Affirmed at B1-PD Senior Secured Bank Credit Facility, Affirmed at B1 (LGD4 from LGD3) Outlook changed to Negative from Positive The principal methodology used in these ratings was Surface Transportation and Logistics published in May 2019. Savage Companies is a transport and logistics company providing a range of services, including materials handling, waste disposal and transportation, to industrial and rail customers. Savage is acquiring the grain and milling businesses of Bartlett and Company, LP, an agribusiness focused on the acquisition, storage, transportation, processing and merchandising of grain, and a leading exporter of grain to Mexico from the United States. Revenues approximated $2.53 billion for the last twelve months ended September 30, 2019. SEAWORLD PARKS: Moody's Rates New $227.5MM Sec. Notes Due 2025 'B3' ------------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to SeaWorld Parks & Entertainment, Inc.'s proposed $227.5 million senior secured notes due 2025. The B3 corporate family rating, B3 secured credit facility rating, and Caa1-PD probability of default rating were all affirmed. The outlook remains negative. Net proceeds of the secured note are expected to be used for general corporate purposes and provide additional liquidity to sustain an extended period of park closures. Pro forma for the transaction, Moody's projects SeaWorld will have adequate liquidity to manage through to the start of the 2021 season even if the parks remain closed in 2020. SeaWorld is projected to have over $400 million of cash on the balance sheet, although the $332.5 million revolver is expected to have $313 million drawn with limited availability after outstanding letters of credit. SeaWorld also obtained an amendment to its financial covenant applicable to the revolving facility to ensure compliance with covenants going forward. The enhanced liquidity position led to an upgrade of the speculative grade liquidity rating (SGL) to SGL-3 from SGL-4. The proposed transaction and revolver draw is projected to lead to higher interest expense and increase leverage to 5.3x from 4.1x as of Q4 2019. A summary of Moody's actions are as follows: Assignments: Issuer: SeaWorld Parks & Entertainment, Inc. Proposed Backed Senior Secured Notes due 2025, assigned B3 (LGD3) Affirmations: Issuer: SeaWorld Parks & Entertainment, Inc. LT Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed Caa1-PD Senior Secured Revolving Credit Facility, Affirmed B3 (LGD3) Senior Secured Term Loan, Affirmed B3 (LGD3) Upgrades: Issuer: SeaWorld Parks & Entertainment, Inc. Speculative Grade Liquidity Rating, upgraded to SGL-3 from SGL-4 Outlook Actions: Issuer: SeaWorld Parks & Entertainment, Inc. Outlook, remains Negative RATINGS RATIONALE The B3 CFR reflects the negative impact of the coronavirus outbreak on SeaWorld's ability to operate its parks, which Moody's projects could lead to substantially higher leverage and weigh on liquidity for as long as the parks remain closed. Moody's projects SeaWorld will have more than enough liquidity to manage through to the start of the 2021 season even if the parks remain closed in 2020. SeaWorld has concentrated exposure to Florida and to a lesser extent California which elevate risks to performance and some of its larger parks are more likely to face competition from destination parks. While SeaWorld has focused on attracting guests from nearby markets in recent years, guest traffic from national and international customers are likely to remain weak and take longer to recover due to the effects of the global pandemic on travel and leisure activities. Attendance levels are also projected to be impacted if the parks open in the near term as consumers may maintain a degree of social distancing and avoid large crowds even if the coronavirus threat abates. Recent cost saving efforts to support liquidity while the parks are closed may also slow the rate of improvement in performance once the parks re-open. SeaWorld competes for discretionary consumer spending from an increasingly wide variety of other leisure and entertainment activities as well as cyclical discretionary consumer spending. The parks are highly seasonal and sensitive to weather conditions, changes in fuel prices, terrorism, public health issues (such as the coronavirus) as well as other disruptions outside of the company's control. Pro forma debt to EBITDA leverage is 5.3x as of Q4 2019 (including Moody's standard adjustments) and is expected to increase materially if SeaWorld is unable to operate its parks in the near term. SeaWorld benefits from its portfolio of parks in key markets including SeaWorld, Busch Gardens, Sesame Place as well as separately branded parks that typically generate meaningful annual attendance. SeaWorld faces negative publicity due to its orca attractions, but performance has improved materially over the past two years after several years of declines. Significant expenditures on new rides and attractions that were scheduled to open in 2020, are expected to support performance when the parks resume operations and lessen the need for capital expenditures in the near future. Moody's expects performance in 2021 to improve and for leverage levels to be in the mid 5x range at the end of 2021, absent any lingering effects on the coronavirus. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The amusement park sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in SeaWorld's credit profile, including exposure to discretionary consumer spending have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and SeaWorld remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on SeaWorld of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. A governance impact that Moody's considers is the resignation of SeaWorld's past two CEOs after a brief tenure with the company. The existing CFO will act as interim CEO at least through the resumption of operations at the company's theme parks. The Board will review the CEO role once the company reopens its theme parks. SeaWorld is a publicly traded company listed on the NYSE. The outlook remains negative due to the impact of the coronavirus outbreak which has limited SeaWorld's ability to operate its amusement parks as scheduled. Moody's expects sizable operating losses and cash usage for as long as the parks remain closed. The uncertainty over the depth and duration of the pandemic will continue to pressure the company's liquidity position and lead to materially higher leverage levels. A weak economic environment and the potential for consumers to maintain social distancing may also weigh on performance. Performance is also projected to be negatively impacted if the parks open in the near term due to reduced travel activity. SeaWorld's speculative grade liquidity rating of SGL-3 reflects the potential for material negative free cash flow if the parks remain closed during the upcoming summer season. SeaWorld is projected to have over $400 million of cash, but availability on its $332.5 million revolver due 2023 is limited with $313 million drawn pro forma for the transaction. SeaWorld typically draws on the revolving credit facility during the first half of the year and repays the balance when the parks open, but is projected to be reliant on the cash balance for liquidity for as long as the parks remain closed. The term loan is covenant light, but the revolver is subject to a springing maximum first lien secured leverage covenant ratio of 6.25x when greater than 35% is drawn. SeaWorld executed an amendment to exempt the company from the financial covenant for the rest of 2020 and allow the use of quarterly Adjusted EBITDA from the last three quarters of 2019 in place of the last three quarters of 2020 beginning in Q1 of 2021. SeaWorld will be subject to a minimum liquidity test of a minimum of $75 million until the earlier of Q3 2021 or when the company starts using actual Adjusted EBITDA in the covenant calculation. SeaWorld spent $195 million on capex in 2019 on new rides and attractions, but Moody's projects SeaWorld will be focused on managing liquidity and will look to reduce capex spending materially in the near term. The large number of new rides and attractions which have not been open to the public, reduce the need for capex in the near term and may support attendance when the parks open. The parks are divisible and could be sold individually, but all of the company's assets are pledged to the credit facility and asset sales trigger 100% mandatory repayment if proceeds are not reinvested within 12 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS A ratings upgrade is unlikely as long as the coronavirus outbreak limits the ability to operate SeaWorld's' amusement parks. The outlook could change to stable if the parks are opened and SeaWorld maintains a good liquidity profile with leverage levels projected to be maintained below 6.5x. Comfort that there is not any significant legislative, legal, regulatory, or activist actions that would materially impact operations would also be required. An upgrade could occur if the parks were opened and leverage was projected to be sustained under 6x, with positive revenue and EBITDA, and an adequate liquidity profile. The ratings could be downgraded due to ongoing cash usage or poor operating performance that led to an elevated risk of default. Leverage sustained above 8x, or an EBITDA minus capex to interest ratio below 1x could also lead to a downgrade. Concern that SeaWorld may not be able to obtain an amendment to its covenants if needed would also lead to a downgrade. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. SeaWorld Entertainment, Inc., through its wholly-owned subsidiary, SeaWorld Parks & Entertainment, Inc., own and operate twelve amusement and water parks located in the US. Properties include SeaWorld (Orlando, San Diego and San Antonio), Busch Gardens (Tampa and Williamsburg) and Sesame Place (Langhorne, PA in addition to one new location in the near term). The Blackstone Group (Blackstone) acquired SeaWorld in 2009 in a leverage buyout for $2.4 billion (including fees). SeaWorld completed an initial public offering in 2013 and Blackstone exited its ownership position in 2017. SeaWorld's annual revenue was approximately $1.4 billion as of Q4 2019. SECURUS TECHNOLOGIES: Bank Debt Trades at 51% Discount ------------------------------------------------------ Participations in a syndicated loan under which Securus Technologies Holdings LLC is a borrower were trading in the secondary market around 49 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The US$283 million term loan is scheduled to mature on November 1, 2025. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. SEMINOLE HARD: Moody's Cuts CFR to Ba3, On Review for Downgrade --------------------------------------------------------------- Moody's Investors Service downgraded Seminole Hard Rock Entertainment, Inc.'s Corporate Family Rating to Ba3 from Ba2, Probability of Default Rating to B1-PD from Ba3-PD and senior secured term loan A rating to Ba3 from Ba2. All ratings have been placed under review for further downgrade. "The downgrade reflects its expectation for a material deterioration in both earnings and credit metrics following the restrictions and closure of all SHRE's restaurants, hotels and casino's due to efforts to contain the spread of the coronavirus " stated Bill Fahy, Moody's Senior Credit Officer. In response to these operating challenges and to strengthen liquidity, SHRE will focus on reducing all non-essential operating expenses and discretionary capex. "While many restaurants are still able to continue to provide take-out, curbside pick-up and delivery, total restaurant sales will still be substantially below normal operating levels for the typical casual dining restaurant while its hotels and casinos remain closed" stated Fahy. The review for downgrade reflects that the coronavirus could have a greater and more sustained impact on SHRE's liquidity and overall credit profile and the potential for there to be more longer-term impacts on consumers ability and willingness to spend on eating out, traveling and gaming. Outlook Actions: Issuer: Seminole Hard Rock Entertainment, Inc. Outlook, Changed To Rating Under Review From Stable Downgrades: Issuer: Seminole Hard Rock Entertainment, Inc. Probability of Default Rating, Downgraded to B1-PD from Ba3-PD; Placed Under Review for further Downgrade Corporate Family Rating, Downgraded to Ba3 from Ba2; Placed Under Review for further Downgrade Senior Secured Bank Credit Facility, Downgraded to Ba3 (LGD3) from Ba2 (LGD3); Placed Under Review for further Downgrade RATINGS RATIONALE SHRE's Ba3 corporate family rating is constrained by its modest scale in terms number of restaurants and earnings concentration in the casual dining segment. While the company's franchised operations, casinos, and hotels have continued to grow, approximately half of the company's revenue comes from the casual dining segment. Overall, the casual dining industry in general has experienced weak traffic patterns and labor cost pressures which are unlikely to materially subside. Positive consideration is given to SHRE's significant geographic diversification and expectation for growth in high margin fee income from new "Hard Rock" branded franchised cafes, casinos and hotels. In addition, Moody's anticipates that's the company's licensed, managed, and franchised operations, which are primarily asset light, will become a larger contributor to the company's overall earnings over time, with a strong pipeline of hotels and casinos. Also considered is its view that SHRE benefits from ownership by its larger and higher rated sole owner, the Seminole Tribe of Florida ("Tribe") (Baa2, negative), which provides a payment guarantee on SHRE's term loan debt. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The restaurant, lodging and casino sectors have been sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in SHRE' credit profile, including its exposure to widespread location restrictions and closures have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and SHRE remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. Governance is a key rating factor for SHRE, which is a 100% owned subsidiary of the Tribe. The Tribe, in early November 2018, signed a resolution and now guarantees SHRE's Term Loan A facility. The guarantee from the Tribe, on a senior unsecured basis, is a guarantee of payment that is subordinated in payment priority to the Tribe Gaming enterprise. The resolution and payment guarantee, along with the continued financial strength of the Tribe, increasingly shows the Tribe's ability and willingness to support SHRE. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The review for downgrade will focus on SHRE's ability to preserve its liquidity during this period of significant earnings decline and evaluate the company's ability to reduce expenses and take other actions to preserve cash. Moody's will also assess the potential length and severity of closures on revenues, earnings, credit metrics and liquidity. The review will also monitor the company's ability to obtain covenant relief that will enable it to file its year-end financial statements within the very near term. Seminole Hard Rock Entertainment, Inc. is an owner-operator and franchisor of Hard Rock cafes, casinos and hotels throughout the world. The company is a wholly-owned subsidiary of the Seminole Tribe of Florida (Baa2 negative) and generates annual revenue of approximately $700 million. SHRE is private and does not publicly disclose detailed financial information. SIMBECK INC: Wants Until July 10 to File Reorganization Plan ------------------------------------------------------------ SIMBECK, INC., filed a motion for an extension of the April 17, 2020 deadline to file a Plan of Reorganization. At this time, the Debtor requests additional time to obtain necessary financial information and to formulate a feasible plan of reorganization. The Debtor's counsel believes that the disclosure statement and plan of reorganization can be completely prepared no later than July 10, 2020. Counsel for the Debtor: Hannah W. Hutman, Esquire HOOVER PENROD PLC 342 South Main Street Harrisonburg, Virginia 22801 Tel: (540) 433-2444 Fax: (540) 433-3916 E-mail: hhutman@hooverpenrod.com About Simbeck Inc. Simbeck, Inc. -- http://www.simbeckinc.com/-- is a transportation company with experience in long-haul, regional, and short-haul truckload freight. With a fleet of more than 70 trucks, Simbeck is located along Interstate 81 in Northern Virginia providing the Company access to all major shipping corridors along the east coast; and from Virginia to Texas. Simbeck, Inc., filed a Chapter 11 petition (Bankr. W.D. Va. Case No. 19-50868) on Oct. 1, 2019, in Harrisonburg, Virginia. In the petition signed by Michael Darnell, Jr., resident, the Debtor was estimated to have assets of no more than $50,000 and liabilities at $1 million to $10 million. Judge Rebecca B. Connelly administers the Debtor's case. HOOVER PENROD, PLC, represents the Debtor. SITEONE LANDSCAPE: Moody's Alters Outlook on B1 CFR to Stable ------------------------------------------------------------- Moody's Investors Service changed the outlook for SiteOne Landscape Supply Holding, LLC to stable from positive, and affirmed the company's B1 Corporate Family Rating, B1-PD Probability of Default Rating, and the B2 rating on its $450 million first lien senior secured term loan due 2024. SiteOne's SGL-2 Speculative Grade Liquidity Rating is maintained. The change in the outlook to stable reflects Moody's view that the broad impact of the coronavirus outbreak on the US economy, and further on residential and commercial end markets, including new construction and repair and remodeling activity, will lead to weaker demand for the company's landscaping products in the near term. Modest weakening in SiteOne's credit metrics is therefore likely in 2020, with anticipation for reduced activity particularly in the second quarter. The stable outlook reflects Moody's expectations that SiteOne will maintain a good liquidity profile in the next 12 to 15 months, reduce acquisition activity and discretionary spending, while demand for its maintenance related product, which represents 40% of total revenue, will demonstrate more resiliency. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The company's residential and commercial end markets are affected by the shock given their sensitivity to consumer demand and sentiment. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The following rating actions were taken: Issuer: SiteOne Landscape Supply Holding, LLC: Corporate Family Rating, affirmed at B1; Probability of Default Rating, affirmed at B1-PD; Speculative Grade Liquidity Rating, maintained SGL-2; Outlook, changed to stable from positive; Issuers: SiteOne Landscape Supply Holding, LLC and SiteOne Landscape Supply, LLC (as co-borrowers): $450 million first lien senior secured term loan due 2024, affirmed at B2 (LGD4). RATINGS RATIONALE The company's B1 Corporate Family Rating reflects: 1) the recurring nature of landscape services, driving demand for products SiteOne sells; 2) lower cyclicality of its maintenance and repair work representing about 40% of the business; 3) the company's national presence, leading market position in a fragmented market, breadth of product and service offering, and diverse customer and supplier base; and 4) track record of increasing scale nationally and in local markets and strengthening of market breadth both organically and through acquisitions. However, SiteOne's rating is constrained by its: 1) exposure to cyclical end markets and vulnerability to demand fluctuations in residential, commercial, and repair & remodeling end markets; 2) thin operating margins that are common to companies in the distribution business; 3) active acquisitive growth strategy that leads to higher debt levels and could present integration challenges, particularly given the company's typical fast acquisition pace; and 4) a track record of debt to EBITDA maintained in the range of 3.0x to 4.0x. SiteOne's SGL-2 reflects Moody's expectations of a good liquidity profile over the next 12 to 15 months, characterized by positive free cash flow, availability under its $375 million revolving credit facility expiring in 2024, flexibility under the springing financial covenant, and no near term maturities. FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company exercises conservative financial policies as it relates to distributions and debt financed acquisitions, maintains organic revenue growth and scale expansion with stable operating margins, while continuously driving leverage towards 3.0x. Additionally, a good liquidity profile accompanied by robust positive free cash flow, and stable end market trends would be important considerations. The ratings could be downgraded if the company experiences end market weakness and declines in revenues and operating margin resulting in adjusted debt to EBITDA approaching 5.0x or EBITA to interest coverage declining below 2.0x. A significant debt-financed acquisition, acquisition integration challenges, shareholder friendly policies, or a weakening in liquidity could also pressure the ratings. The principal methodology used in these ratings was Distribution & Supply Chain Services Industry published in June 2018. SiteOne Landscape Supply Holding, LLC, headquartered in Roswell, is a national wholesale distributor of landscaping supplies in the U.S. and Canada. The company offers approximately 120,000 SKUs, including irrigation supplies, landscape accessories, fertilizer and nursery products, hardscapes, and maintenance supplies and operates in 185 markets through over 550 branch locations in 45 states in the U.S. and six provinces in Canada. Its customers include residential and commercial landscape professionals. In the twelve months ended December 29, 2019, SiteOne generated approximately $2.4 billion in revenues. SIWF HOLDINGS: S&P Lowers ICR to 'B-' on Expected Lower Demand -------------------------------------------------------------- S&P Global Ratings lowered all ratings on U.S.-based SIWF Holdings Inc. (Springs) and its debt, including its issuer credit rating, to 'B-' from 'B'. "The downgrade reflects our forecast that Springs Window Fashions LLC's leverage will likely stay above our downgrade threshold for the next two years. We believe Springs' sales will be hurt in 2020 as the U.S. undergoes a recession caused by the COVID-19 pandemic and consumers pull back on discretionary purchases. We had previously expected Springs would improve leverage to the mid-5x area in 2020, but we now believe its leverage will spike above our 7x downgrade threshold in 2020, and it will likely remain above 7x until 2022. We also expect weak EBITDA interest coverage in the mid-1x area, and we forecast free cash flow to be minimal, at best, in 2020. We believe Springs should be able to return EBITDA interest coverage to the high-1x area and leverage to the low-7x area in 2021 through cost cuts and a moderate revenue recovery. However, we do not believe leverage will return to below 7x until 2022," S&P said. The negative outlook primarily reflects the uncertainty related to the economic effects of the pandemic, and the possibility that S&P could lower the rating if it believes Springs' capital structure becomes unsustainable as a result of a drop in demand that persists longer than what the rating agency forecasts. "We could lower the rating on Springs if we believe its capital structure becomes unsustainable because of a drop in demand much worse than our current forecast, such that the company sustains EBITDA interest coverage in the low-1x area, leverage near 10x, negative free cash flow, or if we believe the company has insufficient liquidity," S&P said. "We could revise the outlook to stable if the coronavirus outbreak in the U.S. stabilizes and the economy strengthens such that Springs shows positive sales momentum, and we believe that interest coverage will remain above 1.5x and liquidity will remain adequate. Although unlikely over the next 12 months given the current economic environment, we could consider raising the rating when we have confidence that Springs will improve leverage to under 7x and sustain EBITDA interest coverage in at least the high-1x area," S&P said. SJV INC: $630K Sale of Liquor License Approved ---------------------------------------------- Judge Kathryn C. Ferguson of the U.S. Bankruptcy Court for the District of New Jersey authorized SJV, Inc.'s sale of Liquor License No. 1526-33-003-007 to Michael Mergott and Marc Pollaro for $630,000. The sale is free and clear of all liens, claims, encumbrances and interests. The Agreement of Sale is approved. The Debtor will utilize the proceeds from the sale of the Property to pay creditors in accordance with the terms and conditions found The Debtor's counsel will serve a true and correct copy of the Order on all parties who were served with copies of the Sale Motion within seven calendar days from the date of entry in the Combined First Modified Chapter 11 Plan that was Confirmed by the Court by Order dated Jan. 27, 2020. A hearing on the Motion was held on March 31, 2020. About SJV, Inc. In 1995, SJV, Inc., was formed for the purposes of operating Karma, a nightclub in Seaside Heights, NJ. In 1997, LASV, Inc., was formed for the purposes of operating, Bamboo, another associated nightclub in Seaside Heights, NJ. Saddy Family, LLC was formed as a real estate holding company for the properties used by SJV and LASV. SJV Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 19-14220) on Feb. 28, 2019. At the time of the filing, the Debtor was estimated to have assets of less than $1 million and liabilities of $1 million to $10 million. The case is assigned to Judge Christine M. Gravelle. The Law Office of Eugene D. Roth is the Debtor's counsel. SJV Inc. is related to and associated with debtors Saddy Family, LLC under Case No. 19-14223-KCF and LASV, Inc., under Case No. 19-14218-KCF (the "Associated Debtors"). SONOMA PHARMACEUTICALS: To Close its Petaluma Facility This Summer ------------------------------------------------------------------ Sonoma Pharmaceuticals, Inc., disclosed in a Form 8-K filed with the Securities and Exchange Commission that it has made a decision to close its Petaluma offices and manufacturing in the summer of 2020. At the beginning of 2019 Sonoma began to carefully evaluate its business with the goal of achieving and sustaining profitability. As part of this process, the Company reviewed all aspects of the Company to find opportunities to cut costs responsibly. The Company currently manufactures in two facilities. At the Company's Petaluma, CA facility the Company primarily manufactures its U.S. dermatology line. At the Company's other Guadalajara, Mexico, facility the Company primarily manufactures products for its international business. The Company's facility in Mexico is a large, modern state-of-the-art plant that has recently manufactured approximately 400,000 units per month with capacity to expand as needed. By closing one of the Company's manufacturing facilities and consolidating manufacturing, the Company expects to realize, after one-time closing costs, significant savings that it expects will strengthen the Company as a whole. The Company is in the process of relocating manufacturing from California to Mexico. Additionally, the Company plans to migrate some U.S. corporate functions to its existing office in Woodstock, Georgia. CFO Appointment As part of this migration, effective on April 14, 2020, the Company's Board of Directors appointed Grant Edwards as the Company's new chief financial officer. Mr. Edwards, age 42, is a partner with TechCXO, LLC. He has over 15 years of experience with SEC reporting and has held financial leadership positions at Harbinger Group Inc. and Sciele Pharma, Inc. Mr. Edwards gained CPA firm experience at Deloitte & Touche LLP and Arthur Anderson LLP. He is a licensed Certified Public Accountant in Georgia and North Carolina. He holds a Masters in Accountancy from East Carolina University. Mr. Edwards is also an adjunct professor for accounting at Georgia State University. The Company agreed to compensate Mr. Edwards $225 per hour. The Company will also grant him $25,000 in common stock in two tranches. The first tranche will be issued as soon as practicable after signing of his agreement, with the closing stock price on the grant date as measure for the number of shares, and the second tranche will be issued on or after Oct. 14, 2020, with the closing stock price on the grant date as measure for the number of shares. The grant, regardless of issue date, will vest in three years, with the first third vesting on April 14, 2021, second third will vest on April 14, 2022 and remaining third will vest on April 14, 2023. If the Company terminates him prior to April 14, 2021, all stock will vest immediately on the termination date. If the Company terminates him on or after April 14, 2021, including by not renewing this agreement, all unvested stock will be forfeited. If Mr. Edwards terminates his agreement, all unvested stock will be forfeited. As part of the transition to Georgia, on April 15, 2020, Mr. John Dal Poggetto was released as the Company's chief financial officer effective on April 24, 2020. The Company thanks Mr. Dal Poggetto for all of his services over the last 17 years and wish him the best in his future endeavors. In connection with Mr. Dal Poggetto's termination the Company entered into a mutual separation and release agreement. Pursuant to the agreement Mr. Dal Poggetto will receive $50,000 in cash as a separation payment, plus $31,400 for accrued paid time off, and 3,086 shares of the Company's common stock. The Company will continue to reimburse Mr. Dal Poggetto for his health care expenses for him and his dependents for six months. He waives his rights to any further payments as well as to the grant of $100,000 signing bonus in equity that was promised to him in his employment agreement. The bonus options granted to Mr. Dal Poggetto on Dec. 31, 2019 will expire on his termination date according to their terms. All other vested equity grants will be exercisable for a period of three months. About Sonoma Sonoma Pharmaceuticals, Inc. -- http://www.sonomapharma.com/-- is a specialty pharmaceutical company dedicated to identifying, developing and commercializing unique, differentiated therapies to millions of patients living with chronic skin conditions. The Company offers early-intervention relief with virtually no side-effects or contraindications. Sonoma reported a net loss of $11.80 million for the year ended March 31, 2019, compared to a net loss of $14.33 million for the year ended March 31, 2018. As of Dec. 31, 2019, the Company had $16.49 million in total assets, $5.28 million in total liabilities, and $11.21 million in total stockholders' equity. Marcum LLP, in New York, NY, issued a "going concern" qualification in its report dated July 1, 2019, citing that the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. SPEEDCAST INTERNATIONAL: Case Summary & 30 Top Unsecured Creditors ------------------------------------------------------------------ Lead Debtor: SpeedCast International Limited Unit 4F, Level 1, 12 Lord Street Botany NSW 2019 Australia Business Description: The Debtors, combined with their non-debtor affiliates, are providers of remote and offshore satellite communications and information technology services. Speedcast's fully-managed service is delivered to more than 2,000 customers in 140 countries via a global, multi-access technology, multi-band and multi-orbit network of 80+ satellites and an interconnecting global terrestrial network, bolstered by on-the-ground local support from 40+ countries. Speedcast services customers in sectors such as commercial maritime, cruise, energy, mining, government, NGOs, enterprise, and media. Chapter 11 Petition Date: April 23, 2020 Court: United States Bankruptcy Court Southern District of Texas Thirty-three affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- SpeedCast International Limited (Lead Case) 20-32243 CapRock Communications (Australia) Pty Ltd 20-32267 CapRock Communications Pte. Ltd. 20-32246 CapRock Comunicacoes do Brasil Ltda. 20-32264 CapRock Participacoes do Brasil Ltda. 20-32265 CapRock UK Limited 20-32245 CCI Services C orp. 20-32257 Cosmos Holdings Acquisition Corp. 20-32259 Evolution Communications Group Limited 20-32271 Globecomm Europe B.V. 20-32269 Globecomm Network Services Corporation 20-32260 HCT Acquisition, LLC 20-32258 Hermes Datacommunications International Limited 20-32261 Maritime Communication Services, Inc. 20-32255 NewCom International, Inc. 20-32270 Oceanic Broadband Solutions Pty Ltd 20-32253 Satellite Communications Australia Pty Ltd 20-32252 SpaceLink Systems II, LLC 20-32263 SpaceLink Systems, LLC 20-32250 SpeedCast Americas, Inc. 20-32273 SpeedCast Australia Pty Limited 20-32251 Speedcast Canada Limited 20-32266 SpeedCast Communications, Inc. 20-32242 Speedcast Cyprus Ltd. 20-32247 SpeedCast France SAS 20-32274 SpeedCast Group Holdings Pty Ltd 20-32249 SpeedCast Limited 20-32248 SpeedCast Managed Services Pty Limited 20-32254 SpeedCast Netherlands B.V. 20-32272 SpeedCast Norway AS 20-32268 SpeedCast Singapore Pte. Ltd. 20-32262 SpeedCast UK Holdings Limited 20-32244 Telaurus Communications LLC 20-32256 Judge: Hon. David R. Jones Debtors' Bankruptcy Counsel: Alfredo R. Perez, Esq. Brenda L. Funk, Esq. Stephanie N. Morrison, Esq. WEIL, GOTSHAL & MANGES LLP 700 Louisiana Street, Suite 1700 Houston, Texas 77002 Tel: (713) 546-5000 Fax: (713) 224-9511 Email: Alfredo.Perez@weil.com Brenda.Funk@weil.com Stephanie.Morrison@weil.com - and - Gary T. Holtzer, Esq. David N. Griffiths, Esq. Kelly DiBlasi, Esq. WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York 10153 Tel: (212) 310-8000 Fax: (212) 310-8007 Email: Gary.Holtzer@weil.com David.Griffiths@weil.com Kelly.DiBlasi@weil.com - and - Paul R. Genender, Esq. Amanda Pennington Prugh, Esq. Jake R. Rutherford, Esq. WEIL, GOTSHAL & MANGES LLP 200 Crescent Court, Suite 300 Dallas, Texas 75201 Tel: (214) 746-7877 Fax: (214) 746-7777 Email: Paul.Genender@weil.com Amanda.PenningtonPrugh@weil.com Jake.Rutherford@weil.com Debtors' Co-Counsel: HERBERT SMITH FREEHILLS Debtors' Financial Advisor: MOELIS AUSTRALIA LTD Debtors' Restructuring Advisor: FTI CONSULTING, INC. Debtors' Claims, Noticing, & Solicitation Agent: KURTZMAN CARSON CONSULTANTS LLC https://www.kccllc.net/speedcast Estimated Assets (on a consolidated basis): $500 million to $1 billion Estimated Liabilities (on a consolidated basis): $500 million to $1 billion The petitions were signed by Michael Healy, chief restructuring officer. A copy of SpeedCast International's petition is available for free at PacerMonitor.com at: https://is.gd/uhv8cv List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Intelsat Corporation Supplier $44,842,908 PO Box 847491 Dallas, TX 75284-7491 United States Tel: 703-559-8230 Email: Billing.Inquiries@Intelsat.com 2. Inmarsat Global Limited Supplier $23,429,214 99 City Road London, EC1Y 1AX UK Shirin Dhala Tel: 44 207 728 1578 Email: VALENTINA.TSIALIATIDOU@INMARSAT.COM 3. New Skies Satellites B.V. Supplier $3,086,233 Roosevelt Plantsoen 4 The Hague, KR 2517 NL Francis Marquez-Credit/ Collection Controller Tel: + 31 70 338 1997 Email: francis.marquez@ses.com; sanjeev.ramcharan@ses.com; billing-nl@ses.com 4. O3b Sales B.V. Supplier $3,032,627 Johan van Oldenbarneveltlaan 5 The Hague, 2582 NE NL Adam Ferneyhough-Accounts Receivable Tel: +31 (0)70 711 6500 Email: ruy.sarmiento@o3bnetworks.com; billing@o3bnetworks.com; adam.ferneyhough@ses.com 5. Thrane and Thrane A/S Supplier $2,705,519 Trading as Cobham Satcom Lundtoftegaardsvej 93 D Kongens Lyngby, 2800 DK Tel: 45 39 55 88 00 Email: satcom.receivables@cobham.com 6. Asia Satellite Supplier $2,513,879 Telecommunications Company Limited 12/F, Harbour Centre Hong Kong HK Tel: +61 (02) 8870 1400 Email: syeung@asiasat.com; rtong@asiasat.com 7. Intellian Technologies USA, Inc. Supplier $2,074,106 11 Studebaker Irvine, CA 92618 US Julia Kim-Accountant Tel: +1-949-727-4498 ext. 1111 Email: julia.kim@intelliantech.com; accounting.us@intelliantech.com 8. McKinsey & Company Inc. Professional $1,950,000 555 California Street Suite 4800 Services San Francisco, CA 94104 US Tel: +1 415 981 0250 9. APT Satellite Company Limited Supplier $1,795,166 22 Dai Kwai Street, Tai Po Industrial Estate Hong Kong, HK Tel: (852) 2600 2100 Email: christine@apstar.com 10. Eutelsat Asia Pte. Ltd. Supplier $1,774,390 8 Temasek Boulevard #15-02 Suntec Three Tower Singapore, 018981 SG Mervyn Eu Zhi Yong Tel: (65) 6808 2088 Email: lngszeyim@eutelsat.com 11. SES Government Solutions, Inc. Supplier $1,540,798 11790 Sunrise Valley Drive, Suite 300 Reston, VA 20191 US Sefika Toker-AR Administrator Tel: (703) 610-0977 (571) 294-5132 Email: sefika.toker@ses-gs.com; emily.mosso@ses-gs.com 12. Satelites Mexicanos, Supplier $1,443,546 S.A. de C.V. Avenida Paseo de la Reforma No. 222 Piso 20 y 21 Mexico, ME 6600 MX Tel: +52 (55) 2629 5800 Email: jonathan.cortez@eutelsat.com 13. Inmarsat Solutions B.V. Supplier $1,384,472 Loire 158-160, Entrance B The Hague, 2491 AL NL Tel: +1 709 748 4280 Email: AR.Inquiries@inmarsat.com 14. Telesat Canada Supplier $1,275,304 1601 Telesat Court Ottawa, ON K1B5P4 CA Tel: 613 748 0123 Email: mvinnakota@telesat.com 15. Eutelsat S.A. Supplier $1,224,044 70 Rue Balard Paris, 75015 FR Mervyn Eu Zhi Yong Tel: +33 15398 4747; +33 1 53 983752 Email: credit@eutelsat.com; hzared@eutelsat.com; victor.perez@eutelsat.com 16. Seatel Inc. Supplier $1,175,044 PO Box 100749 Atlanta, GA 30384-0749 US Sabine Brunner-Accounts Receivable Tel: 1 (925) 798 7979 Email: Sabine.Brunner@cobham.com; satcom.concord.ar@cobham.com 17. Iridium Satellite LLC Supplier $876,998 1750 Tysons Blvd, Suite 1400 McLean, VA 22102 US Tel: 1.703.287.7400 Email: Wouter.Deknopper@iridium.com 18. Sky Perfect JSAT Corp Supplier $744,978 1-14-14- Akasaka, Minato-Ku, Tokyo Tokyo, 107-0052 JP Ken Kunita Tel: 81 3 5571 7770/ +852 3157 0722 Email: kunita-ken@sptvjsat.com 19. Airbus Defence and Space Ltd. Supplier $673,000 Gunnels Wood Road Stevenage, Herts SG1 2AS GB Tel: 44 (0) 1438 282828 Email: kelly.hawkes@airbus.com; mark.mclauchlan@airbus.com 20. Cobham Satcom Supplier $636,857 Lundtoftegaardsvej 93D Kongens Lyngby, 2800 DK 6567952205 Email: Geoff.Allsop@cobham.com; liga.liu@cobham.com 21. AT&T Supplier $597,526 PO Box 105414 Atlanta, GA 30348-5414 US Shaun Feimster Tel: 800 724 9198 Email: sf1615@att.com; brm-qa@cctools.att-mail.com 22. Globalstar USA Supplier $510,038 1351 Holiday Square Blvd Covington, LA 70433 US Jennifer Plaskus-Credit & Collections Supervisor Tel: 1-985-335-1534 Email: jennifer.plaskus@globalstar.com 23. Vodafone Fiji Ltd Supplier $492,655 168 Princes Road Tamavua, Suva, FJ Tel: +64 21 361 063 (679) 331 2000 Email: nazmin.nisha@vodafone.com 24. Telesat International Limited Supplier $488,861 4th Floor, 80 Petty France London, SW1H 9EX GB Tel: 1-(908) 470-488 Email: wmccabe@telesat.com 25. Russian Satellite Supplier $426,832 Communications Company 3A Bld, 1, Nikoloyamskiy per. Moscow, 109289 RU Tel: 495 730 04 50 Email: sco@rscc.ru 26. Comtech EF Data Supplier $417,276 Lockbox 9651 PO Box 70280 Philadelphia, PA 19176 US Phil Lester-Credit Manager Tel: 1 480 333 2200 Email: plester@comtechefdata.com; smorris@comtechefdata.com 27. Telstra International Supplier $380,316 10, 11, 13, 14, 19/F Telecom House 3 Gloucester Road Wan Chai HK Tel: 852 2983 3388 Email: TGBilling@team.telstra.com 28. Level 3 Communications Supplier $376,906 PO Box 910182 Denver, CO 80291-0182 US Michael Santschi Tel: 602 512 2513; 800-871-9244 Email: michael.santschi@centurylink.com; Billing@centurylink.com 29. Tampnet UK Ltd Supplier $357,179 38 Carden Place Aberdeen, AB10 1UP GB Tel: 44 7467950265 Email: finance.uk@tampnet.com 30. Intelsat Global Sales and Supplier $338,210 Marketing Ltd Building 5, Chiswick Park 555 Chiswick High Road London, WV W4 5YF SPEEDCAST INTERNATIONAL: To Recapitalize Under Chapter 11 --------------------------------------------------------- Botany, Australia-based Speedcast International Limited (ASX: SDA) on April 23 announced that, after evaluating a variety of options to strengthen its balance sheet in ways that support its long-term growth and success, it has initiated a voluntary financial restructuring under chapter 11 of the United States Bankruptcy Code. In conjunction with chapter 11 petitions filed on behalf of Speedcast International Limited and certain of its U.S. and international subsidiaries, the Company also announced that it has received a commitment for up to $90 million in new money debtor-in-possession financing from the holders of its outstanding term loan debt, which combined with its existing cash flows, will help to ensure it is able to meet its go-forward commitments to all stakeholders throughout the restructuring. None of the entities associated with the Company's Government Business Entities (UltiSat, Inc., Globecomm Systems Inc. and all associated entities) have filed for Chapter 11 relief. The Government Business Entities are fully financially independent and continue to operate and generate sufficient cash flow to support their operations. A full list of the filing entities is available at www.kccllc.net/speedcast. All entities -- regardless of their status in the chapter 11 process -- are operating and serving customers as usual. The Company fully intends to uphold its commitments to its customers and employees, and to pay suppliers in the normal course of business for all goods and services delivered to any Speedcast entity from today forward. "The decisive actions we announced today are about strengthening our financial position through the proven legal framework that the chapter 11 process provides -- and we are confident we will be well positioned to maximize the full potential of our expanded platform as a result of the actions we're taking now to align our balance sheet strength with our clear industry leadership," said Peter Shaper, Speedcast Chief Executive Officer and Executive Director. "We fully expect that our customers and employees, among other stakeholders, will see no change in their interactions with our Company as a result of this filing. In fact, we expect to be a stronger business partner and employer as result of the additional financing our existing lenders have committed, based on their strong belief in our go-forward potential." The financial restructuring will allow Speedcast to overcome the near-term headwinds it is facing as a result of pressures on its customers' businesses. A significant percentage of the Company's customers are in the maritime and oil and gas industries and have extended payment terms as they work to overcome significant industry pressures. The impact on Speedcast's business was further exacerbated as the COVID-19 pandemic spread worldwide and halted activities for Speedcast's cruise line customers. These dynamics made it impossible for Speedcast to complete its planned equity raise -- or any recapitalization transaction -- outside of the Court-supervised chapter 11 process. Maintaining Operations Through the Chapter 11 Process The U.S. chapter 11 process provides a legal framework through which Speedcast will work with creditors and other stakeholders to develop a Plan of Reorganization that specifies how the Company will reduce its debt and gain access to new sources of liquidity. This is a proven process that many companies -- based in the U.S. and around the globe -- have successfully utilized to achieve their financial goals and position their businesses for long-term growth and success. Speedcast plans to emerge from the process during the 2020 calendar year, and ideally hopes to have it completed within six months. While under the Court's protection, Speedcast fully intends to continue its global operations uninterrupted. Customers should expect to receive the same leading products and services delivered by Speedcast prior to the chapter 11 filing and should see no changes in the way they interact with the Company. The Company also has taken the necessary steps and fully intends to pay employees as usual, regardless of entity or where they are based. Employees should not see any changes in their roles, wages or benefits as a result of the filing and will continue to work diligently to provide uninterrupted service to the Company's customers and other stakeholders. Suppliers may call (424) 236-7236 (International) or (877) 709-4758 (U.S./Canada) with any questions they may have about the process. About Speedcast International Speedcast International Limited and its affiliates are providers of remote and offshore satellite communications and information technology services. Speedcast's fully-managed service is delivered to more than 2,000 customers in 140 countries via a global, multi-access technology, multi-band and multi-orbit network of 80+ satellites and an interconnecting global terrestrial network, bolstered by on-the-ground local support from 40+ countries. Speedcast services customers in sectors such as commercial maritime, cruise, energy, mining, government, NGOs, enterprise, and media. On April 23, 2020, Speedcast International Limited and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-32243). Speedcast was estimated to have $500 million to $1 billion in assets and liabilities. The Hon. David R. Jones is the case judge. Speedcast is advised by Weil, Gotshal & Manges LLP as global legal counsel and Herbert Smith Freehills LLP as co-counsel. FTI Consulting, Inc. is Speedcast's financial and operational advisor. Moelis Australia Advisory Pty Ltd and Moelis & Company LLC are Speedcast's investment bankers. Its claims agent is Kurtzman Carson Consultants LLC, maintaining the site http://www.kccllc.net/speedcast/ STARFISH HOLDCO: S&P Alters Outlook to Negative, Affirms 'B-' ICR ----------------------------------------------------------------- S&P Global Ratings revised its outlook on Pearl River, N.Y.-based Starfish Holdco (doing business as Syncsort) to negative from stable, and affirmed its 'B-' issuer credit rating on the company. Syncsort's large one-time restructuring and integration costs from the Pitney acquisition will depress unadjusted FOCF in 2019 and 2020. Due to its acquisition of the Pitney Bowes Software and Data business segment, Syncsort has incurred large one-time restructuring costs. S&P believes that Syncsort will have roughly the same large amount of one-time restructuring costs in both 2019 and 2020. Syncsort generated modestly negative FOCF in 2019 because it was weighed down by those one-time costs. "While we believe that Syncsort will be able to achieve its full cost savings plan and cut extraneous costs in this macroeconomic environment, we believe that will not be enough to offset the large one-time restructuring costs from the Pitney acquisition and decline in high EBITDA margin license and maintenance revenue, which will drive Syncsort to generate negative FOCF in 2020. We also believe that cash collection could become an issue as companies look to preserve its own cash by not paying its vendors, providing additional headwinds to Syncsort's FOCF in 2020," S&P said. The negative outlook reflects S&P's expectation that Syncsort will have large one-time restructuring costs and a decline in revenue from the COVID-19 impact that will drive negative unadjusted FOCF in 2020. However, S&P believes, due to the company's mission-critical nature, some lost revenue will come back in 2021 and, along with the one-time restructuring costs rolling off, will help drive Syncsort to generate positive unadjusted FOCF in 2021. "We could downgrade Syncsort if we came to believe that a debt exchange or restructuring, or distressed debt repurchase, would occur due to a severe impact on operating performance from a weakening macroeconomic environment. We could also downgrade if we believed the macroeconomic impact from COVID-19 had fundamentally changed the Syncsort business such that revenue lost in 2020 would not come back, leading to leverage sustained above 10x and negative unadjusted FOCF in 2021," S&P said. "We could look to revising the outlook to stable if we believed that Syncsort would be able to generate positive unadjusted FOCF and leverage below 8x through the macroeconomic impact from COVID-19 and integration of Pitney Software and Data business segment. This could occur if it were able to keep license and professional service revenue stable and tighten operating expenses," S&P said. STARION ENERGY: Court Approves Disclosure Statement --------------------------------------------------- Judge Mary F. Walrath has ordered that the Disclosure Statement filed by Starion Energy, Inc., et al., is approved as containing adequate information within the meaning of section 1125 of the Bankruptcy Code. The Confirmation Hearing Notice and the Non-Voting Notices are approved in all respects. The form of Ballots is approved in all respects. Any Plan Supplement must be filed with this Court not later than May 1, 2020. If any claimant seeks to have a claim temporarily allowed for purposes of voting to accept or reject the Plan pursuant to Bankruptcy Rule 3018(a), such claimant is required to file a motion (the "Claims Estimation Motion") for such relief no later than May 8, 2020. Any such Claims Estimation Motion may be resolved by agreement between the Debtors and the movant without the requirement for further order or approval of the Court. Any objections to a Claims Estimation Motion must be filed with the Court by May 15, 2020 at 4:00 p.m. (Eastern Time). A hearing will be held before the Court on May 28, 2020 at 11:30 a.m. (Eastern Time) or as soon thereafter as counsel can be heard, to consider confirmation of the Plan at the United States Bankruptcy Court for the District of Delaware, before the Honorable Mary F. Walrath in the United States Bankruptcy Court for the District of Delaware, 824 North Market Street, 5th Floor, Courtroom 4, Wilmington, DE 19801. Objections to the confirmation of the Plan must be filed and served on or before May 8, 2020 at 4:00 p.m. (Eastern Time). Any party supporting the Plan may file a reply to any objection to confirmation of the Plan by May 15, 2020. Ballots must be received on or before May 8, 2020 at 4:00 p.m. (Eastern Time) ("Voting Deadline") in accordance with the instructions on the Ballots, unless extended by the Debtors in writing. Any Plan Supplement must be filed with this Court not later than May 1, 2020. The Plan voting certification must be filed by May 15, 2020. The Debtors’ brief in support of the Plan must be filed by May 15, 2020. About Starion Energy Founded in 2009, Starion Energy -- https://www.starionenergy.com/ -- is a competitive electric supplier that markets and sells electricity to retail customers. Starion participates in certain "deregulated" markets -- markets in which the state has allowed third-party energy providers to market and sell electricity supply as an alternative to the electric supply procured and provided by the customers' utility. It has operations in Connecticut, Delaware, District of Columbia, Illinois, Massachusetts, Maryland, New Jersey, New York, Ohio, and Pennsylvania. Based in Middlebury, Connecticut, Starion Energy is a member of the Retail Energy Supply Association (RESA). Starion Energy and its affiliates, Starion Energy PA, Inc., and Starion Energy NY, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 18-12608) on Nov. 14, 2018. At the time of the filing, Starion Energy disclosed $26,888,675 in assets and $6,956,141 in liabilities. The Hon. Mary F. Walrath is the case judge. Gellert Scali Busenkell & Brown, LLC, is the Debtors' legal counsel. Donlin Recano is the claims agent. STORMBREAK RANCH: Unsecured to Recover 100% in Plan --------------------------------------------------- Stormbreak Ranch-FW, LP, filed a Chapter 11 Plan of Reorganization. Stormbreak Ranch reasonably estimates the fair market value of its property in Waelder, Texas, to be $5,100,000. The Property has previously been listed to sell for $5,100,000. Class 6 General Unsecured Creditors (Unsecured, Insider Creditor with no Liens, Daniel J. Parish, Executive Manager of the Debtor) are impaired. The class is estimated to recover 100%. The claims are to be paid in full to the extent allowed upon sale of the Property, unless other terms are agreed to by Stormbreak Ranch and Daniel Parish. The following are the amount of claims of unsecured creditors: * Daniel Parish, Funds loaned for operations with a claim of $1,969,493 * Daniel Parish, Earned but unpaid wages with a claim of $317,363 * Internal Revenue Service non-priority taxes to the extent they are not amended by the IRS with a claim of $2,253.64 (estimated by the IRS but disputed by the Debtor). The actual amount owed is likely $0. The income from the sale of the Property will be used to pay the Creditors as set forth in the Plan. A full-text copy of the Disclosure Statement dated April 6, 2020, is available at https://tinyurl.com/sy3j65w from PacerMonitor.com at no charge. The Debtor's attorney: Ryan Lott The Lott Firm, PLLC Texas Bar No. 24099886 100 Congress Avenue, Suite 2000 Austin, TX 78701 Tel: 512-809-6951 E-mail: thelottfirm@gmail.com About Stormbreak Ranch-FW Stormbreak Ranch-FW, LP, manages and operates land and personal property located at 4168 County Road 444, Waelder, Texas 78959 (collectively, the "Property"). The land is a 70.74-acre ranch located in Caldwell and Gonzales Counties, Texas. The personal property consists of farm and ranching equipment. The Property is substantially all of Stormbreak Ranch's assets. Stormbreak Ranch is managed by its Executive Manager, Daniel J. Parish. Stormbreak Ranch-FW, LP, filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 20-10040) on Jan. 7, 2020. In the petition signed by Daniel J. Parish, manager, the Debtor disclosed $4,475,905 in assets and $4,508,267 in liabilities. Judge Christopher oversees the case. Ryan Lott, Esq., at The Lott Firm, is the Debtor's bankruptcy counsel. SUMMIT MIDSTREAM: Moody's Lowers CFR to B2, Outlook Negative ------------------------------------------------------------ Moody's Investors Service downgraded Summit Midstream Partners, LP's Corporate Family Rating to B2 from Ba3, Probability of Default Rating to B2-PD from Ba3-PD, perpetual preferred units rating to Caa2 from B3 and Speculative Grade Liquidity Rating to SGL-4 from SGL-3. The rating outlook remains negative. Moody's concurrently downgraded Summit Midstream Holdings, LLC's senior unsecured notes rating to Caa1 from B1. The rating outlook remains negative. Moody's also downgraded Summit Midstream Partners Holdings, LLC's (SMP Holdings, an indirect parent of Summit) CFR to Caa2 from B3, PDR to Caa2-PD from B3-PD and senior secured term loan rating to Caa2 from B3. The rating outlook remains negative. "Summit Midstream's leverage is gradually increasing as it struggles to grow operating cash flow," said Amol Joshi, Moody's Vice President and Senior Credit Officer. "The company should generate modest free cash flow in 2020, but it faces rising debt refinancing risk in 2022 while the company strives to fund its Double E Project as well as extinguish its remaining deferred purchase price obligation associated with previous drop downs." Downgrades: Issuer: Summit Midstream Holdings, LLC Senior Unsecured Notes, Downgraded to Caa1 (LGD5) from B1 (LGD5) Issuer: Summit Midstream Partners Holdings, LLC Probability of Default Rating, Downgraded to Caa2-PD from B3-PD Corporate Family Rating, Downgraded to Caa2 from B3 Senior Secured Term Loan, Downgraded to Caa2 (LGD3) from B3 (LGD3) Issuer: Summit Midstream Partners, LP Probability of Default Rating, Downgraded to B2-PD from Ba3-PD Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-3 Corporate Family Rating, Downgraded to B2 from Ba3 Perpetual Preferred Stock, Downgraded to Caa2 (LGD6) from B3 (LGD6) Outlook Actions: Issuer: Summit Midstream Holdings, LLC Outlook, Remains Negative Issuer: Summit Midstream Partners Holdings, LLC Outlook, Remains Negative Issuer: Summit Midstream Partners, LP Outlook, Remains Negative RATINGS RATIONALE SMLP has weak liquidity and the company's revolver availability will be limited by its 5.5x leverage covenant. Furthermore, Summit is faced with a $300 million unsecured notes maturity in August 2022 as well as revolving credit facility maturity in May 2022, and SMP Holdings' term loan also matures in May 2022. While the company faces rising debt refinancing risk, it will need to extinguish its remaining deferred purchase price obligation associated with previous drop downs, as well as raise funding for the Double E natural gas pipeline project in the Delaware Basin (Double E Project). The company has struggled to grow operating cash flow, and this low commodity price environment increases volumetric risk and will likely hurt leverage metrics. These risks resulted in the downgrade of SMLP's CFR to B2 with a negative outlook and SMP Holdings' CFR to Caa2 with a negative outlook. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The midstream energy sector has been one of the sectors most significantly affected by the decline in oil & gas commodity prices. More specifically, SMLP's credit profile is vulnerable to shifts in market sentiment in these unprecedented operating conditions given its reliance on the financial health of its main E&P counterparty customers. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the level of impact on SMLP of the breadth and severity of the shock, and the uncertainty over when oil & gas prices might recover. SMLP's SGL-4 Speculative Grade Liquidity Rating reflects its weak liquidity profile. At December 31, 2019, SMLP had $4.9 million of cash as well as $27.4 million of restricted cash, and $677 million drawn under Summit's $1.25 billion secured revolving credit facility. The revolving credit facility matures in May 2022 and has financial covenants including a maximum total leverage ratio of 5.5x, maximum senior secured leverage ratio of 3.75x, and a minimum interest coverage ratio of 2.5x. The company was in compliance with these covenants as of December 31. However, availability under the revolver was constrained by these covenants and was approximately $100 million at December 31. SMLP's B2 CFR is supported by its geographically diverse gathering and processing assets and diversified customer base. Over 95% of the company's 2019 gross margin was derived from fee-based contracts, which in many cases is supported by acreage dedications and minimum volume commitments (MVCs). SMLP's capital spending will be considerably reduced in 2020, and it will likely be focused in the Utica, Williston and DJ Basins, while Delaware Basin activity will include spending associated with the Double E Project. Capital spending in its legacy assets in the Piceance Basin, Barnett Shale and Marcellus Shale should be minimal. Leverage should increase through 2020 and is higher when consolidated for SMP Holdings' debt. The Double E Project is at an unrestricted subsidiary and its completion should improve the company's profile, but its funding over the next two years would increase consolidated debt balances. Debt could increase further depending upon the mix of debt and equity used to fund the remaining $180.75 million deferred purchase price obligation due in January 2022 related to certain assets dropped down from SMP Holdings in 2016, which continues to pressure SMLP's rating. Under the terms of the 2016 dropdown, SMLP at its option, may satisfy all or a portion of the deferred purchase price obligation in SMLP common units. Summit's unsecured notes are rated Caa1, two notches below SMLP's B2 CFR, reflecting the priority claim of Summit's relatively large $1.25 billion revolver to its assets. The preferred units are rated Caa2, three notches below SMLP's B2 CFR, and they receive 100% equity treatment. Moody's believes that the Caa2 rating on the preferred units is more appropriate than the rating suggested by Moody's Loss Given Default for Speculative-Grade Companies methodology. SMP Holdings' Caa2 CFR reflects its structural subordination to the debt at Summit and preferred units at SMLP. SMP Holdings is a pure-play general partner without any other operating assets. At February 18, 2020, SMP Holdings owned about 48% of SMLP's limited partnership units and the non-economic GP interest in SMLP, as well as SMLP's remaining $180.75 million deferred purchase price obligation due in January 2022. SMP Holdings' ability to service its debt is reliant on (i) distributions from SMLP, a distribution stream which is junior to SMLP's substantial financing and operating requirements and SMLP's subsidiary Summit's debt and (ii) payments made by SMLP to SMP Holdings related to the remaining deferred purchase price obligation. The Caa2 CFR and the three-notch difference to SMLP's B2 CFR further reflects SMP Holdings' high leverage on a stand-alone basis. Moody's expects that there will be no additional debt at SMP Holdings, but there exists a $25 million revolver carve-out. The Caa2 rating on SMP Holdings' senior secured term loan, constituting all of its debt, is in line with its CFR, and reflects the term loan's first priority claim on the equity ownership interest in SMLP. SMP Holdings has a weak liquidity profile. SMP Holdings' liquidity could be hurt if distributions received from SMLP are reduced. With limited administrative overhead though, SMP Holdings does not have significant liquidity needs. SMP Holdings' term loan has a minimum interest coverage ratio requirement of 2x. There is a 1% mandatory amortization of the term loan per annum and 100% excess cash flow recapture when stand-alone leverage is above 2x, but stepping down to 75% when standalone leverage ratio is less than 2x. The alternate sources of liquidity are limited given that substantially all assets secure the term loan, and net proceeds from the sale of LP units, beyond 3.5 million units, could be required to offer to repay the term loan. SMLP's negative outlook reflects weak liquidity and rising debt refinancing risk in a low commodity price environment. SMP Holdings' rating outlook is negative, reflecting SMLP's negative rating outlook. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS A rating downgrade of SMLP could be considered if standalone SMLP leverage exceeds 6x, consolidated leverage (including SMP Holdings) exceeds 6.5x, SMLP's scale reduces materially due to asset sales without adequate debt reduction, or liquidity further deteriorates. An upgrade of SMLP is possible if the company maintains leverage below 5.5x and consolidated leverage (including SMP Holdings) below 6x, while achieving adequate liquidity and addressing the funding structure of the remaining deferred purchase price obligation due in 2022 and the Double E Project. A downgrade of SMP Holdings would occur if SMLP is downgraded, or if distributions received from SMLP are negatively impacted. An upgrade of SMP Holdings could be considered if SMLP's rating is upgraded. The principal methodology used in these ratings was Midstream Energy published in December 2018. Summit Midstream Partners, LP is a publicly-traded master limited partnership primarily engaged in natural gas, crude oil and produced water gathering and/or processing in the Utica Shale, Williston Basin, Piceance Basin, DJ Basin, Barnett Shale, Delaware Basin and Marcellus Shale. At February 18, 2020, SMP Holdings owned about 48% of SMLP's LP units and the non-economic GP interest in SMLP. SUNGARD AS: Bank Debt Trades at 69% Discount -------------------------------------------- Participations in a syndicated loan under which Sungard AS New Holdings III LLC is a borrower were trading in the secondary market around 31 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD300 million PIK term loan is scheduled to mature on November 3, 2022. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. SUNOPTA INC: Oaktree Capital, et al. Report 19.5% Equity Stake -------------------------------------------------------------- In an amended Schedule 13D filed with the Securities and Exchange Commission, these entities reported beneficial ownership of shares of common stock of SunOpta Inc. as of April 15, 2020: Shares Percent Beneficially of Reporting Person Owned Class ---------------- ------------ ------- Oaktree Organics, L.P. 16,226,934 16.6% Oaktree Huntington Investment Fund II, L.P. 3,199,098 3.6% Oaktree Huntington Investment Fund II GP LP 3,199,098 3.6% Oaktree Fund GP, LLC 19,426,032 19.5% Oaktree Fund GP I, L.P. 19,426,032 19.5% Oaktree Capital I, L.P. 19,426,032 19.5% OCM Holdings I, LLC 19,426,032 19.5% Oaktree Holdings, LLC 19,426,032 19.5% Oaktree Capital Group, LLC 19,426,032 19.5% Oaktree Capital Group Holdings GP, LLC 19,426,032 19.5% Brookfield Asset Management Inc. 19,426,032 19.5% Partners Limited 19,426,032 19.5% The ownership percentages are based upon a total of 88,148,363 Common Shares of the Issuer issued and outstanding, as reported in the Issuer's Annual Report on Form 10-K filed with the SEC on Feb. 27, 2020, and assuming the conversion of Preferred Shares beneficially owned by each Reporting Person, as applicable, into Common Shares. A full-text copy of the regulatory filing is available for free at: https://is.gd/cyV9Kz About SunOpta Inc. Headquartered in Ontario, Canada, SunOpta Inc. is a global company focused on plant-based foods and beverages, fruit-based foods and beverages, and organic ingredient sourcing and production. SunOpta specializes in the sourcing, processing and packaging of organic, natural and non-GMO food products, integrated from seed through packaged products; with a focus on strategic vertically integrated business models. SunOpta reported a loss attributable to common shareholders of $8.78 million for the year ended Dec. 28, 2019, compared to a net loss attributable to common shareholders of $117.11 million for the year ended Dec. 29, 2018. As of Dec. 28, 2019, the Company had $923.4 million in total assets, $710.93 million in total liabilities, $82.52 million in series A preferred stock, and $129.91 million in total equity. * * * As reported by the TCR on Sept. 18, 2019, S&P Global Ratings lowered its issuer credit rating on Mississauga, Ont.-based SunOpta Inc. to 'CCC' from 'CCC+'. The downgrade reflects weak operating performance due to crop shortages in SunOpta's key strawberry sourcing regions. SYNIVERSE HOLDINGS: Bank Debt Trades at 61% Discount ---------------------------------------------------- Participations in a syndicated loan under which Syniverse Holdings Inc is a borrower were trading in the secondary market around 40 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD220 million term loan is scheduled to mature on March 11, 2024. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. TAPSTONE ENERGY: Moody's Withdraws Ca CFR on Debt Restructuring --------------------------------------------------------------- Moody's Investors Service withdrew all of Tapstone Energy, LLC's ratings. Outlook Actions: Issuer: Tapstone Energy, LLC Outlook, Changed To Rating Withdrawn From Negative Withdrawals: Issuer: Tapstone Energy, LLC Probability of Default Rating, Withdrawn, previously rated D-PD Corporate Family Rating, Withdrawn, previously rated Ca Senior Unsecured Notes, Withdrawn, previously rated C (LGD5) RATINGS RATIONALE Moody's withdrew Tapstone's ratings following completion of its debt restructuring. Tapstone exchanged 99.5% of its senior unsecured notes due 2022 into a new $5 million unsecured term loan due 2024 and common equity. Moody's has decided to withdraw the ratings because of inadequate information to monitor the ratings, due to the issuer's decision to cease participation in the rating process. Tapstone, headquartered in Oklahoma City, Oklahoma, is an independent exploration and production company focused in the Anadarko Basin. THOMPSON PUBLISHING: Bank Debt Trades at 54% Discount ----------------------------------------------------- Participations in a syndicated loan under which Thompson Publishing Group Inc is a borrower were trading in the secondary market around 46 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD100 million term loan matured on January 12, 2014. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. TOPGOLF INT'L: Bank Debt Trades at 18% Discount ----------------------------------------------- Participations in a syndicated loan under which Topgolf International Inc is a borrower were trading in the secondary market around 82 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD350 million term loan is scheduled to mature on February 8, 2026. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. TOWN SPORTS: Moody's Lowers CFR to Ca, Outlook Stable ----------------------------------------------------- Moody's Investors Service downgraded Town Sports International, LLC's Corporate Family Rating to Ca from Caa2, Probability of Default Rating to Ca-PD from Caa2-PD, and first lien credit facilities to Ca from Caa1. Moody's also took no action on the company's Speculative Grade Liquidity Rating of SGL-4. The outlook is stable. Town Sports International, LLC is a wholly owned subsidiary of the publicly traded company Town Sports International Holdings, Inc. together referred to as "Town Sports". The downgrade reflects Moody's expectation that significant revenue and earnings deterioration in 2020 due to coronavirus related facility closures and membership declines will increase leverage and, along with mounting refinancing pressures, further elevate default risk. The recent termination of the planned acquisition of certain Flywheel studios also eliminates a potential combination that could have enhanced refinancing prospects. Town Sports' entire debt structure matures this year with the first lien senior secured $15 million revolver expiring in August 2020 and the $178 million senior secured term loan maturing in November 2020. The downgrade to Ca reflects the elevated risk of bankruptcy filing or other default in the near term. The downgrade of the revolver and term loan additionally reflects Moody's expectation for recovery in default and that certain leases will remain in place and diminish the loss-absorption cushion for the credit facility. The negative effect on consumer income and wealth stemming from job losses and asset price declines will diminish discretionary resources to spend on leisure activities once the facilities reopen. Moody's expects membership attrition to increase and lower new recruitment because consumers may be reluctant to work out in enclosed social settings until the risk of coronavirus spreading is reduced. As a result, Moody's expects debt-to-EBITDA to rise to meaningfully in 2020 with high cash burn during facility closures adding to liquidity pressure. The facility closures began in mid-March and the timing of when the facilities will reopen remains uncertain. Moody's took the following rating actions: Issuer: Town Sports International, LLC Corporate Family Rating, downgraded to Ca from Caa2 Probability of Default Rating, downgraded to Ca-PD from Caa2-PD Speculative Grade Liquidity Rating, unchanged at SGL-4 Senior secured revolving credit facility, downgraded to Ca (LGD4) from Caa1 (LGD3) Senior secured term loan, downgraded to Ca (LGD4) from Caa1 (LGD3) Outlook actions: Outlook: revised to stable from negative RATINGS RATIONALE Town Sports Ca CFR reflects the elevated risk of near term default due to coronavirus-related closures and membership declines, in combination with the refinancing risk related to the $15 million revolver expiring in August 2020 and $178 million term loan due in November 2020. Currently, all of its gyms are closed due to efforts to contain the coronavirus and Moody's expects membership once facilities reopen to be weaker. The company also faced revenue pressure in 2019 prior to the onset of the coronavirus due to declines in comparable club performance. The rating also reflects Town Sports concentration in the highly fragmented and competitive fitness club industry which has low barriers to entry, high attrition rates, and is experiencing a trend towards either high-end or budget gym memberships which places pressure on the mid-tier price point in which Town Sports currently operates. Fitness club memberships are discretionary and revenue and earnings are pressured when household income weakens. However, the rating considers the company's well-recognized brand name in its operating markets. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The fitness sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Town Sports' credit profile, including its exposure to US quarantines have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Excel remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Town Sports of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. The SGL-4 speculative-grade liquidity rating reflects the company's weak liquidity because the entire debt structure matures in 2020 and the company is reliant on external capital to refinance at a time when earnings and operating cash flow is weakened by the efforts to contain the coronavirus. The stable outlook reflects Moody's expectation that the probability of a default is high over the next year and is appropriately reflected in the Ca rating. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if operating performance or anticipated recoveries for creditors in an event of default weaken further. The ratings could be upgraded if the clubs reopen, membership, revenue and earnings recover meaningfully, and the company successfully refinances its first lien credit facilities at a manageable cost. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Headquartered in Jupiter, FL, Town Sports International Holdings, Inc., through its wholly-owned operating subsidiaries which include Town Sports International, LLC, owns and operates about 186 fitness clubs in 7 states, the District of Columbia, Puerto Rico and 3 clubs in Switzerland. Revenue for the fiscal year ended December 31, 2019 was about $467 million. TRANSCENDIA HOLDINGS: Moody's Cuts CFR to Caa1, Outlook Stable -------------------------------------------------------------- Moody's Investors Service downgraded Transcendia Holdings, Inc.'s Corporate Family Rating to Caa1 from B3 and its Probability of Default Rating to Caa1-PD from B3-PD. Moody's also downgraded the ratings on the company's first-lien senior secured credit facilities due 2022 and 2024 to B3 from B2 and its second-lien senior secured credit facility due 2025 to Caa3 from Caa2. The outlook is stable. The downgrade reflects Moody's expectation that Transcendia's credit metrics will remain weak over the next 12 to 18 months given the company's exposure to cyclical end markets. The company has not met projected expectations after completing several debts financed acquisitions. Leverage will remain high at over 8.0 times and free cash flow will be weak. Transcendia has been negatively impacted by insourcing by a large customer and sluggish sales to certain other customers in certain segments. The company has a significant exposure to retail, auto and industrial end markets which are expected to remain slow and continue to depress operating results. These sectors have been significantly affected by the shock caused by the rapid and widening spread of the coronavirus outbreak given their sensitivity to consumer demand and sentiment. Transcendia has significant exposure to industries that may be affected by the coronavirus including autos, industrials and retail. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. For more information on research on and ratings affected by the coronavirus outbreak, please see moodys.com/coronavirus. Downgrades: Issuer: Transcendia Holdings, Inc. Probability of Default Rating, Downgraded to Caa1-PD from B3-PD Corporate Family Rating, Downgraded to Caa1 from B3 Senior Secured 1st Lien Bank Credit Facility, Downgraded to B3 (LGD3) from B2 (LGD3) Senior Secured 2nd Lien Bank Credit Facility, Downgraded to Caa3 (LGD6) from Caa2 (LGD5) Outlook Actions: Issuer: Transcendia Holdings, Inc. Outlook, Remains Stable RATINGS RATIONALE Weaknesses in Transcendia's credit profile include the company's lack of contractual cost pass-throughs, fragmented industry structure in the packaging sector and small scale (revenue). Approximately 40% of sales are generated in cyclical end markets. A significant percentage of products across end markets are commoditized. Transcendia operates in a fragmented and competitive industry and is significantly smaller than rated competitors. Governance risks are heightened given Transcendia's private-equity ownership, which carries the risk of an aggressive financial policy, that could include debt-funded acquisitions or dividends. The credit profile is supported by the company's exposure to food and beverage and healthcare end markets and some more technically complex products, which have more stable demand. The company also long-standing relationships with its top customers, which includes many blue-chip names. Approximately 30% of sales are generated from food and beverage and health care end markets. Transcendia has an average relationship of 20+ years with its top ten customers who generate approximately 20% of sales. The stable outlook reflects Moody's expectation that Transcendia will execute on its efficiency initiatives, commercialize new business and manage liquidity in order to maintain credit metrics within the category and preserve liquidity through the expected recessionary environment. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if credit metrics, the operating and competitive environment, or liquidity deteriorate. The rating is especially sensitive to any deterioration in free cash flow or back up liquidity. Specifically, the ratings could be downgraded if debt to EBITDA remains above 7.5 times, EBITDA to interest expense declines below 1.2 times and funds from operations to debt remains below 4.0%. The ratings could also be downgraded if the company undertakes a large debt-financed acquisition or dividend. The ratings could be upgraded if the company sustainably improves credit metrics while also maintaining adequate liquidity and refraining from debt-financed acquisitions that weaken credit metrics. Specifically, the ratings could be upgraded if debt to EBITDA declines below 6.75 times, EBITDA to interest expense increases above 2.25 times and funds from operations to debt increases above 6.5%. Moody's projects that Transcendia will have adequate liquidity over the next 12-18 months. Free cash flow is expected to be weak, but counterbalanced by a meaningful cash balance and availability on its revolver. The company has a $75 million revolver that expires in May 2022. As of 3Q19, Transcendia had $20 million in cash and $24 million available on its revolver. Historically, the company has used the revolver for acquisitions, but is expected to preserve liquidity over the next twelve months. The credit facilities have a springing net total first lien leverage ratio covenant of 7.0 times, which is applicable whenever the outstanding balance on the revolver is greater than 35% of the aggregate principal amount of the revolving commitments. The company is expected to have a modest, but sufficient cushion under the covenant over the next four quarters to enable a full draw of the revolver balance. Transcendia has no significant seasonality. Most assets are encumbered under the secured facilities leaving little alternate liquidity sources other than international assets which are not pledged as security under the credit agreement. The principal methodology used in these ratings was Packaging Manufacturers: Metal, Glass, and Plastic Containers published in May 2018. Headquartered in Franklin Park, IL, Transcendia Holdings, Inc. is a provider of engineered specialty films materials across a range of end-markets. The company manufactures specialty films by extrusion of resin or converting film for specific customer applications. Transcendia has 18 manufacturing facilities and twelve distribution centers (seven are third-party-operated) globally. The company earns approximately 77% of sales in North America, 21% in Europe and 1% in Asia. For the twelve months ended September 30, 2019, sales totaled approximately $418 million. Transcendia is a portfolio company of West Street Capital Partners VII, a family of funds, advised by Goldman Sachs's merchant banking division. Transcendia does not publicly disclose financial information. TRICO GROUP: S&P Alters Outlook to Negative, Affirms 'B' ICR ------------------------------------------------------------ S&P Global Ratings revised Trico Group LLC's outlook to negative from positive, and affirmed its 'B' issuer credit rating. Trico's exposure to the original equipment auto market (around 25% of sales) and aftermarket exposure (about 75%) renders it exposed to the ongoing coronavirus pandemic. Although there continues to be significant uncertainty around the length of the current pandemic, Trico's operating performance will be negatively affected over the next few months as original equipment manufacturers (OEMs) keep their production shuttered. Additionally, S&P believes demand for its aftermarket segment products will be affected in the near term as people stay home and focus on other nondiscretionary needs. The negative outlook reflects S&P's expectations for tight covenant cushion on the company's maximum leverage covenant, and that credit metrics could be worse than the rating agency expects over the next 12 months. "We could lower the rating during the next 12 months if the impact of coronavirus is larger than we expect, leading to debt to EBITDA above 6x and free operating cash flow (FOCF) to debt toward break-even. We could also lower the rating if liquidity erodes and there are concerns regarding the company's ability to meet its covenant or mandatory debt and interest payments," S&P said. "We could revise the outlook to stable during the next 12 months if the impact of coronavirus is not as large as we expect, leading to debt to EBITDA trending toward 5x, FOCF to debt of above 5%, and sufficient cushion on the covenants," S&P said. TUTOR PERINI: Fitch Alters Outlook on B+ IDR to Negative -------------------------------------------------------- Fitch Ratings has affirmed Tutor Perini Corp.'s Issuer Default Rating at 'B+'. Fitch has also affirmed the company's senior first-lien revolver at 'BB+'/RR1 and senior unsecured notes and convertible notes at 'BB-'/RR3. The Outlook has been revised to Negative from Stable. The Negative Outlook reflects the vulnerability of TUT's profitability due to the cyclical nature of the engineering and construction (E&C) industry, as well as the company's limited margins and uneven project cash flows. Fitch projects the company's leverage (gross debt/EBITDA) will temporarily exceed the negative rating sensitivity, while cash flow will remain pressured in the near term. Further negative rating action could occur if the company is unable to manage near-to-intermediate term challenges stemming from the coronavirus pandemic or liquidity becomes limited due to increased cash costs, or if management is unable to refinance the convertible notes due in late 2020. Fitch believes a meaningful number of near-term risks to TUT's credit profile have become more prevalent due to the coronavirus pandemic. Some examples include: labor shortages, project delays, fewer new awards across the industry, and a lower volume of short-cycle and/or non-essential work. These factors could affect both revenue and cost. Other factors that pressure the rating include: cash flow seasonality, cyclicality, and key person risk. Offsetting these concerns, the affirmation of the 'B+' rating is supported by the company's strong backlog, a high degree of revenue and cash flow visibility of many of the company's projects, and the likely long-term secular tailwinds bolstered by an expected increase to infrastructure spending. Fitch also believes most of TUT's key contracts are considered essential, and that the company will be able to continue executing on backlog throughout 2020. Customer and contract diversification also support the rating. KEY RATING DRIVERS Infrastructure Projects Mostly Considered Critical: Many of TUT's projects are considered essential work across many of the geographies in which it operates and may not be subject to shelter-in-place orders. These rules are generally governed on a state-by-state basis and could also vary depending on the type of project. For example, construction on the Metro Purple Line in Los Angeles County is still underway as of April 2020, while projects in states such as Pennsylvania are subject to regulations limiting the work of non-life-sustaining businesses, including construction, though several dozen projects were deemed essential and restarted. States like New York have shifted towards more restrictions in recent weeks, but still allow essential construction, including projects on infrastructure, utilities, and healthcare facilities, among other examples. Any adverse changes to individual states' policies could result in a significant hit to the company's financial profile. Labor Disruption Possible: Fitch views labor disruption as one of the greatest risks to TUT's credit profile while managing through the coronavirus pandemic. If there is a labor shortage or employees are unable to perform work, costs associated with project delays are likely and could materially hurt the company's profitability and cash flow. As of April 2020, Fitch does not believe significant disruptions or reductions to the company's workforce have occurred, although Fitch has included a modest impact throughout 2020 in its rating case for conservatism purposes. Profitability Vulnerable: Fitch considers the company's EBITDA and FCF to be highly sensitive and vulnerable to cyclical downturns and project delays, and Fitch expects margins to be volatile over the next 12 to 24 months as it manages through the coronavirus pandemic. While Fitch does not forecast the company experiencing any material reductions in construction activity, progress on completions could be delayed. Fitch projects TUT's EBTIDA margin will decline to below 5% in 2020 as the company manages challenges associated with the coronavirus pandemic before gradually rebounding in 2021 and 2022. Fitch also expects FCF will be volatile in 2020 and will largely depend on management's ability to navigate working capital fluctuations against cash collections and potentially slower project completions. Strong Backlog, Challenging Bidding Environment: Fitch considers the company's strong backlog to be one of the leading positive drivers for the company. Backlog was at approximately $11.2 billion as of December 2019, up from around $9.3 billion as of year-end 2018. While this strong level should support the company in the near-to-intermediate term, Fitch expects the bidding environment will be challenging in 2020 and that the company will have to execute to limit effects from the coronavirus pandemic on revenue. Over the long term, Fitch expects any progress towards a federal infrastructure spending bill or further expansion of state-by-state infrastructure spending could revive the bidding environment and present significant industry tailwinds. Fitch expects the company to exercise caution in bidding on large projects of over $1 billion given the increase in backlog to greater than $11 billion. TUT has historically expressed caution that backlogs greater than $10 billion could strain the company's ability to continue bidding on large contracts while executing on existing projects; however, the addition of incremental project executives has alleviated some of management's concern. Fitch considers execution risk to be modest. Adequate and Improving Leverage for the Rating: Fitch projects the company's leverage (gross debt to EBITDA) could be weak for the 'B+' rating in 2020 as the company manages through the coronavirus pandemic. Fitch views the company's willingness to maintain significant long-term debt balances, as well as consistent revolver utilization, as credit negatives in the highly cyclical E&C sector. Fitch calculated TUT's leverage at approximately 3.9x as of December 2019, and Fitch expects it could temporarily deteriorate above its negative rating sensitivity in 2020. Key Person Risk: The CEO and chairman of the board, Ronald Tutor, is 79 years old. In Fitch's view, Ronald Tutor's role within the company cannot be easily replaced by one single person. Rather, it would require multiple current executives to take on additional responsibilities to match his level of contribution within a reasonable timeframe. In Fitch's discussion with company management, it was made clear that Mr. Tutor is deeply engaged in many facets of the enterprise, much more so than one would expect of a typical CEO and/or chairman. Fitch believes the company could experience some initial challenges in a potential transition period but has experienced executives in place who would be able to step in to fill additional capacity as needed. The E&C landscape is one in which experienced leadership heavily affect a firm's ability to win new awards. In addition, contract disputes are not unusual, and those relationships are often the underpinning of settlements and change-order compromises. These negotiations help firms avoid costly arbitration or litigation and are often critical to a firm's ability to remain profitable. Fitch assesses this as a concern in the inevitable absence of Mr. Tutor due to the potential reputational impact. However, Fitch expects the company to continue addressing this concern over the intermediate term. Adequate Liquidity, Limited Flexibility: Fitch considers the company's liquidity to be adequate to cover working capital fluctuations, capex and debt servicing during a moderate temporary downturn. However, financial flexibility is limited, as a prolonged negative operating environment would likely require the company to access capital markets to refinance upcoming maturities, including the convertible notes due in 2021. Fitch calculated the company's total available liquidity at $326 million as of YE19, comprised of approximately $90 million of readily available cash and $236 million of revolver availability. The company also had approximately $8.0 million of restricted cash and $103.8 million of cash related to variable interest entities, which Fitch considers restricted. Separately, TUT's liquidity could become strained during a downturn given the inherent seasonal capital intensity and cyclicality of the sector. Collections in the first half of the year are typically weaker than the latter half and often lead to the company drawing on its revolver early in the year before paying it down during the second half of the year. Fitch believes the limited liquidity could also become strained as a result of one or more major project delays or cancellations. The company has stated an intention to increase liquidity in part by working capital management, although Fitch believes the coronavirus pandemic could limit the company's ability to execute on this objective in the near term. Reasonable Project Risk Profile: Fitch views the company's overall project risk profile as reasonable for the rating level and within sector expectations. Fitch further views the firm's consolidated profit margins as consistent with similar projects performed by its peers. Fitch views the company's working capital management as adequate, as the firm has produced moderately positive aggregate FCF over the previous four years. The company's working capital flows feature moderate volatility but less than some of its peers, largely driven by its proven ability to accurately forecast project costs, which allows client advances to satisfy most funding needs. Scale and Market Position: TUT's rating is supported by the firm's scale and domestic market position. The company maintains operations across the U.S., in addition to a diverse set of customers across a wide range of end markets. This geographic and end-market diversity, coupled with its extensive longstanding customer relationships, allow its segments to be highly competitive on projects of all sizes while maintaining limited exposure to a single region, industry or customer. The company's markets and capabilities include bridges, tunnels, highways, commercial and industrial buildings, mass-transit systems, condominiums, hospitality and gaming, aviation, education, sports facilities and healthcare. Diversified Projects and Customers: The company features a balanced split between private and public customers, with approximately 62% of its 2019 revenue generated from federal, state and local government agencies and the remaining 38% originating from private project owners. The company's December 2019 backlog of approximately $11.2 billion comprises 54% higher-margin civil projects, 25% building projects and the remaining 21% specialty contractor projects. Individual customer concentration is limited, particularly following the significant backlog growth since 2016. DERIVATION SUMMARY TUT's 'B+' rating is primarily derived from the company's product and end-market diversification compared to peers, strong reputation and meaningful growth prospects. Fitch considers the company's profitability to be adequate when compared to other companies within the E&C industry, as the company has returned positive FCF on average for the past three years. Fitch considers the main constraints on the rating to be the financial structure, limited liquidity and vulnerable profitability. Fitch believes the company's limited liquidity, when coupled with balance sheet debt, could exacerbate risks to the company's credit profile and operations due to the inherent seasonality and cyclicality across the sector. KEY ASSUMPTIONS Fitch's Key Assumptions Within its Rating Case for the Issuer -- No material changes to state governments' current infrastructure spending plans; -- The company refinances its convertible notes or revolving credit facility ahead of December 2020; -- A majority of the company's projects are considered essential business, limiting the revenue decline in 2020 - caused mostly by slower construction progress due to social distancing and moderately less workforce availability - to low double-digits; a u-shaped sales recovery back to 2019 levels occurs by 2022; -- EBITDA margins temporarily fall below 5% in 2020 due to modest project delays; -- The company draws on its revolver in 2020 to stem the cash decline but repays a portion of outstanding borrowings in 2021; -- Annual capex between $65 million and $80 million through 2023; -- The company effectively manages liquidity and working capital; -- No material acquisitions, dividends, or share repurchases. Key Recovery Rating Assumptions -- The recovery analysis assumes TUT would be reorganized as a going concern in bankruptcy rather than liquidated. -- A 10% administrative claim. Going Concern (GC) Approach -- Fitch assumes a distressed scenario in which the company loses several major customers/projects in conjunction with a large negative legal claim. -- The GC EBITDA estimate of $162 million reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which it bases the enterprise valuation. -- The GC EBITDA reflects the company's limited profitability and uneven cash flows but also its strong backlog and long-term secular tailwinds. -- An enterprise value (EV) multiple of 5.0x is applied to the GC EBITDA to calculate a post-reorganization EV. In determining the multiple, Fitch considered the company's high exposure to cyclicality, as well as its diversification and strong reputation. Additionally, Fitch considered the low trading multiple in the sector (TUT currently trades at less than 8.0x EV/EBITDA) compared to other E&C and industrial companies. -- Fitch notes that in this scenario, when comparing to a liquidation approach, Fitch utilized a 25% accounts receivable (A/R) recovery rate for the liquidation value analysis due to a high likelihood that much of the company's current project receivables would not be available to pre-petition creditors as a result of project disputes/litigation. It is customary within the industry for major disputes with project owners to drag on for years, even post-bankruptcy, and in any case would likely be settled for a significant discount. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- An increase in available liquidity to above $750 million, including at least $500 million in cash and equivalents (excluding cash held in joint ventures [JVs]), for a prolonged period; -- Decreased adjusted debt/EBITDAR to below 2.5x for a sustained period; -- FCF margin above 3% for a prolonged period; -- A material improvement in EBITDA margins to above 8% for a sustained period; Fitch could stabilize the rating if concerns of disruption from the coronavirus pandemic subside and/or the company manages through the downturn without margins materially deteriorating and is able to refinance its convertible notes. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- It becomes less likely that the company refinances its convertible notes or amends its revolving credit facility; -- State governments materially shift infrastructure spending plans to the extent that it affects TUT's backlog and revenue generation; -- State or federal governments enact more strict restrictions regarding whether to classify construction as an essential business to the extent it impacts TUT's operations; -- A deterioration in adjusted debt/EBITDAR to above 4.5x for a prolonged period; -- A material decline in EBITDA margins to below 3%; -- Failure to maintain at least $350 million in seasonally adjusted available liquidity (excluding cash held in JVs) for a prolonged period; -- Consistently negative FCF; -- Any indication of meaningful impending project losses, or legal or contingent liabilities which could lead to a severe liquidity strain or reputational damage to the company; -- Debt-funded share repurchases or dividends. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch adjusted EBITDA to exclude the impact of an after-tax charge of $119.4 million resulting from an adverse jury verdict in the case related to construction of the Alaskan Way Viaduct Replacement Project ("SR 99") by a joint venture - in which the company holds a 45% share as a minority partner. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG CONSIDERATIONS ESG issues are credit neutral or have only a minimal credit impact on the entity(ies), either due to their nature or the way in which they are being managed by the entity(ies). UNIVISION COMMUNICATIONS: Moody's Rates $360MM Sr. Sec. Notes 'B2' ------------------------------------------------------------------ Moody's Investors Service has assigned a B2 rating to Univision Communications, Inc.'s new $360 million senior secured notes due 2025. The proceeds from the new notes will be used to retire the company's existing 2022 senior secured notes. Concurrently, Moody's affirmed Univision's B2 corporate family rating, it's B2-PD Probability of Default Rating and the B2 rating on Univision's senior secured debt. The outlook is stable. Assignments: Issuer: Univision Communications Inc. Senior Secured Regular Bond/Debenture, Assigned B2 (LGD3) Affirmations: Issuer: Univision Communications Inc. Probability of Default Rating, Affirmed B2-PD Corporate Family Rating, Affirmed B2 Senior Secured Bank Credit Facility, Affirmed B2 (LGD3) Senior Secured Regular Bond/Debenture, Affirmed B2 (LGD3) Outlook Actions: Issuer: Univision Communications Inc. Outlook, Remains Stable RATINGS RATIONALE Univision's B2 corporate family rating reflects the company's high leverage, of 8.1x at year end 2019 (Moody's adjusted and two year average) as well as Moody's expectations that leverage will remain elevated in 2020 as the coronavirus outbreak will lead to sharp declines in advertising demand in the second and possibly through the third quarter of the year. Univision's B2 CFR also reflects the company's national scale as well as its established position as the leading Spanish-language media operator targeting the high growth Hispanic population. The rating also reflects the company's strong EBITDA margins (35% in 2019) and the fact that around 40% of the company's revenue are derived from contracted retransmission fees. Moody's expects these to increase by double digit percentage in 2020 as the company recently renewed the majority of its retransmission agreements and will benefit from having a full year of revenue from DISH. The company's preliminary results for Q1 2020 show a 19% increase in retransmission revenue vs. Q1 2019 which more than offset a 2% decline in core advertising leading to an 8% increase in net revenue. Moody's regards the current pandemic as a social risk under Moody's ESG framework, given the substantial implications for health and safety. The response to the coronavirus outbreak with stay at home orders, rapid unemployment increases and a potential looming recession in 2020 will lead to advertising demand -- which is correlated to the economic cycle and consumer confidence -- declining materially in 2020. Univision's exposure to national and local advertising means that its revenue is expected to decline materially in the second and potentially third quarter of 2020. While the pressure on top line will be material, Moody's expects Univision to be able to at least partially mitigate the impact of these on EBITDA. In addition to cost saving measures already being implemented, the company's cost structure benefits from a flexible programming license agreement with Grupo Televisa, S.A.B. ("Televisa" - Baa1 negative, which owns 36% of Univision). The stable outlook reflects Moody's expectation that while Univision's leverage might deteriorate temporarily as a result of the coronavirus impact on advertising demand, the company has levers at its disposal to mitigate this decline. The stable outlook also reflects Moody's expectations that as advertising recovers, the company's strong viewership should allow it to grow and return to a leverage more commensurate with a B2 rating in 2021. Univision has good liquidity supported by around $650 million of cash and cash equivalent at the end of March 2020. In addition, the company has $638 million available under its revolving bank credit facility and Moody's expects Univision to continue generating free cash flow in 2020. The revolver is subject to a springing maintenance covenant set at 8.5x net senior secured debt/EBITDA (as defined in the credit agreement) to be tested if utilization exceeds 25% of total revolver capacity. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS: The ratings could be downgraded should Univision's leverage (on a two-year average) increase to above 8.0x on a sustainable basis or should the company's liquidity position weaken as a result of deteriorating EBITDA. While an upgrade is unlikely in the current environment of heavily declining TV advertising demand, upwards pressure on the ratings would require Univision to reduce leverage to below 6.0x on a sustainable basis and Moody's adjusted free cash flow / debt above 5% - both ratios on a two-year average. Univision Communications Inc., headquartered in New York, is a leading Spanish-language media company in the U.S. operating in two segments, Media Networks and Radio. The company is wholly owned by Broadcast Media Partners Holdings, Inc., which is owned by Univision Holdings, Inc. On February 24, 2020, the company along with Searchlight Capital Partners, LP ("Searchlight"), a global private investment firm, and ForgeLight LLC ("ForgeLight"), an operating and investment company focused on the media and consumer technology sectors, announced a definitive agreement in which Searchlight and ForgeLight will acquire a majority ownership interest in Univision from all stockholders of Univision other than Televisa which retained its ownership stake. The transaction is expected to close in the second half of 2020. Univision's Media Networks segment includes television operations with 65 owned and operated broadcast stations; two leading broadcast networks (Univision Network and UniMas); 10 cable networks (including Galavision, TUDN -- previously Univision Deportes Network - and Univision tlnovelas), and digital operations (including a network of online and mobile apps as well as video, music and advertising services). The company also has rights to the substantial majority of LIGA MX teams and certain UEFA properties. Univision Radio includes the company's 58 owned and operated radio stations. In 2019, Univision reported $2.7 billion in revenue and $957 million in EBITDA (Management's Adjusted OIBDA). USR PARENT: Bank Debt Trades at 17% Discount -------------------------------------------- Participations in a syndicated loan under which USR Parent Inc is a borrower were trading in the secondary market around 83 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The US$200 million term loan is scheduled to mature on September 12, 2024. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. WIRECO WORLDGROUP: Moody's Cuts CFR to Caa1, Outlook Negative ------------------------------------------------------------- Moody's Investors Service downgraded WireCo WorldGroup Inc.'s Corporate Family Rating to Caa1 from B3, Probability of Default Rating to Caa1-PD from B3-PD, senior secured 1st lien term loan to Caa1 from B3 and senior secured 2nd lien term loan to Caa3 from Caa2. The outlook has been revised to negative from stable. "With significant exposure to global economic activity, in particular to the volatile oil and gas industry, low profitability and elevated leverage, WireCo is highly susceptible to a prolonged cyclical downturn and may not be able to materially improve its leverage" said Emile El Nems, a Moody's VP-Senior Analyst. The following rating actions were taken: Downgrades: Issuer: WireCo WorldGroup, Inc. Probability of Default Rating, Downgraded to Caa1-PD from B3-PD Corporate Family Rating, Downgraded to Caa1 from B3 Senior Secured 1st Lien Term Loan, Downgraded to Caa1 (LGD3) from B3 (LGD3) Senior Secured 2nd Lien Term Loan, Downgraded to Caa3 (LGD5) from Caa2 (LGD5) Outlook Actions: Issuer: WireCo WorldGroup, Inc. Outlook, Changed to Negative from Stable RATINGS RATIONALE WireCo's Caa1 CFR reflects the company's high exposure to cyclical end markets, elevated debt leverage and declining EBITA margin. At year-end 2020, Moody's projects total debt-to-EBITDA to be at 9.7x and EBITA-to-Interest expense at 0.5x. At the same time, the rating takes into consideration the company's solid market position as a global provider of high-tension steel and synthetic ropes and wires, its global footprint, diverse end markets and broad customer base. The negative outlook reflects Moody's view that WireCo will face elevated uncertainty restoring its profitability, generating free cash flow and improving its credit metrics should the oil and gas industry downturn persist longer than anticipated. Furthermore, the rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook and falling oil prices have forced many of the company's end markets to either temporarily postpone or cancel daily activity. Typically, the demand for synthetic and steel wire cables is largely influenced by activity in oil and gas exploration and production, maintenance related work in commercial construction, fishing as well as activity in ports and maritime transportation all of which stopped operating as a result of the health care crisis. More specifically, the weakness in WireCo's credit profile has left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and WireCo remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. As of December 31, 2019, WireCo (on a pro forma basis post its ABL amendment dated January 30, 2020) had $19 million in cash and $55 million of availability under its $115 million ABL facility maturing August 2023. However, the company's liquidity profile will become increasingly more challenged. The company's cash position and the availability under the ABL facility may not be sufficient to meet additional shortfalls should this economic environment persist longer. The ABL has a springing fixed charge coverage covenant, which gets triggered if availability dips below the greater of 10% of the global loan cap or $8.5 million. FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The rating could be upgraded if: - The company materially improves its free cash flow and liquidity profile - Adjusted EBITA-to-Interest expense is above 1.0x for an extended period of time - Adjusted debt-to-EBITDA is below 7.0x for an extended period of time The rating could be downgraded if: - The company is unable to improve its free cash and liquidity profile - The likelihood increases that the company will be unable to pay its interest expense and make its annual debt amortization payments - The potential losses for lenders or the probability of restructuring increases The principal methodology used in these ratings was Manufacturing Methodology published in March 2020. Headquartered in Prairie Village, Kansas, WireCo is a global manufacturer and seller of wire ropes, high-tech synthetic ropes, electromechanical cable, and other related products. The company sells into diverse industries including infrastructure, industrial, oil and gas, mining, and marine and fishing. WIREPATH HOME: Bank Debt Trades at 17% Discount ----------------------------------------------- Participations in a syndicated loan under which Wirepath Home Systems LLC is a borrower were trading in the secondary market around 83 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The US$292 million term loan is scheduled to mature on August 4, 2024. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. WOK HOLDINGS: Bank Debt Trades at 51% Discount ---------------------------------------------- Participations in a syndicated loan under which Wok Holdings Inc is a borrower were trading in the secondary market around 49 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The US$430 million term loan is scheduled to mature on March 1, 2026. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. YUMA ENERGY: Questionnaires on Committee Formation Due on April 24 ------------------------------------------------------------------ The United States Trustee is soliciting members for an unsecured creditors committee in the bankruptcy cases of Yuma Energy Inc., et al. The committee formation meeting however will not be held in person. If one wishes to be considered for membership on any official committee that is appointed, one must complete a Questionnaire Form and return it to the Office of the United States Trustee no later than 4:00 p.m. (Central Standard Time), on Friday, April 24, 2020 by email to erin.schmidt2@usdoj.gov and elizabeth.a.young@usdoj.gov. A representative from the U.S. Trustee's Office will contact creditors submitting a questionnaire to schedule telephonic interviews. Questions should be sent to Erin Schmidt or Elizabeth Young using the email addresses indicated. About Yuma Energy Yuma Energy, Inc. -- http://www.yumaenergyinc.com/-- is an independent Houston-based exploration and production company. The Company is focused on the acquisition, development, and exploration for conventional and unconventional oil and natural gas resources, primarily in the U.S. Gulf Coast, the Permian Basin of west Texas and California. The Company has employed a 3-D seismic-based strategy to build a multi-year inventory of development and exploration prospects. Its current operations are focused on onshore properties located in southern Louisiana, southeastern Texas and recently, in the Permian basin of west Texas. In addition, the Company has non-operated positions in the East Texas Eagle Ford and Woodbine, and operated positions in Kern County in California. Yuma Energy Inc. and three of its affiliates filed for bankruptcy protection on April 15, 2020 (Bankr. N. D. Texas, Lead Case No. 20-41455). The petitions were signed by Anthony C. Schnur, chief restructuring officer. As of December 31, 2019, Yuma posted $32,290,329 in total assets and $28,270,794 in total liabilities. The Debtors have tapped Fisher Broyles LLP as their counsel; Seaport Gordian Energy LLC as their investment banker; Ankura Consulting Group LLC as their financial advisor and Stretto as their administrative advisor. ZEP INC: Bank Debt Trades at 55% Discount ----------------------------------------- Participations in a syndicated loan under which Zep Inc is a borrower were trading in the secondary market around 45 cents-on-the-dollar during the week ended Fri., April 17, 2020, according to Bloomberg's Evaluated Pricing service data. The USD175 million term loan is scheduled to mature on August 11, 2025. As of April 17, 2020, the full amount is drawn and outstanding. The Company's country of domicile is U.S. [*] S&P Alters Outlook on Debt Ratings of Local Gov'ts to Stable ---------------------------------------------------------------- S&P Global Ratings revised its outlook to stable from positive on certain long-term and underlying ratings on local governments with outstanding tax-secured debt due to heightened risks on various credit factors caused by the COVID-19 pandemic and related recession. "The outlook revisions to stable from positive reflect our view that previous upward momentum will likely be stunted by the broad challenges facing these organizations due to the COVID-19 pandemic and recession. While we no longer think a higher rating is likely during the outlook period, we consider these local governments' ratings stable at this time. A stable outlook reflects our view that the rating is unlikely to change during the outlook period, which is up to two years," S&P said. As described in S&P's article, "An Already Historic U.S. Downturn Now Looks Even Worse," published April 16, 2020, on RatingsDirect, the recession's trajectory is much deeper and faster than previously anticipated. S&P Global Economics now projects that the U.S. GDP will contract by 5.3% in 2020. Though S&P expects the economy will begin to recover in the second half of 2020, it anticipates that the recovery will be gradual and constrained by some form of continued social distancing as fears persist over the continued spread of COVID-19. Given this rapid and severe economic shock, S&P believes upward rating movement is unlikely over the intermediate term. "At this time, over 90% of the U.S. population is under stay-at-home restrictions. We believe shelter-in-place and other directives to protect the health and safety of individuals from the community spread of COVID-19 present economic challenges to local governments. Specifically, drops in consumer spending due to social distancing, increased business closures, a drop in oil prices to 18-year lows and unemployment reaching record high levels will continue to present local governments with ongoing pressures. We view the uncertainty on the timing and duration of the spread of the coronavirus throughout the country as a health and safety social risk under our environmental, social, and governance (ESG) factors," S&P said. Due to the swift onset of an economic recession and resulting fiscal headwinds across the sector, S&P Global Ratings revised its U.S. public finance sector outlooks to negative as an indication that credit trends, while not immediate, will generate more negative than positive rating actions for the remainder of 2020. The U.S. government's recent passage of the Coronavirus Aid, Relief, and Economic Security Act appropriates $150 billion across all state and local governments to offset costs related to the COVID-19 pandemic and alleviate liquidity pressures. S&P views this federal government relief as a mitigating factor helping limit the near-term credit and liquidity pressures for many local governments. However, uncertainty remains regarding the timing and sufficiency of these measures and whether there will be any additional state or federal support to local governments. A list of Affected Ratings can be viewed at: https://bit.ly/2VLFfeb [^] BOOK REVIEW: BOARD GAMES - Changing Shape of Corporate Power ---------------------------------------------------------------- Authors: Arthur Fleischer, Jr., Geoffrey C. Hazard, Jr., and Miriam Z. Klipper Publisher: Beard Books Softcover: 248 pages List Price: $34.95 Order your personal copy today at http://www.amazon.com/exec/obidos/ASIN/1587981629/internetbankrupt A ruling by the Delaware Supreme Court on January 29, 1985 was a wake-up call to directors of U. S. corporations. On this date, overruling a lower court decision, the Delaware Supreme Court ruled that the nine board members of Chicago company Trans Union Corporation were "guilty of breaching their duty to the company's shareholders." What the board members had done was agree to sell Trans Union without a satisfactory review of its value. The guilty board members were ordered by the Court to pay "the difference between the per share selling price and the 'real' market value of the company's shares." Needless to say, the nine Trans Union directors were shocked at the guilt verdict and the punishment. The chairman of the board, Jerome Van Gorkom, was a lawyer and a CPA who was also a board member of other large, respected corporations. For the most part, it was he who had put together the terms of the potential sale, including setting value of the company's stock at $55.00 even though it was trading at about $38.00 per share. News of the possible sale immediately drove the stock up to $51.50 per share, and was commented on favorably in a "New York Times" business article. Still, Van Gorkom and the other directors were found guilty of breaching their duty, and ordered by Delaware's highest court to pay a sum to injured parties that would be financially ruinous. This was clearly more than board members of the Trans Union Corporation or any other corporation had ever bargained for. It was more than board members had ever conceived was possible without evidence of fraud or graft. The three authors are all attorneys who have worked at the highest levels of the legal field, business, and government. Fleischer is the senior partner of the law firm Fried, Frank, Harris, Schriver & Jacobson at the head of its mergers and acquisitions department. He's also the author of the textbook "Takeover Defenses" which is in its 6th edition. Hazard is a Professor of Law and former reporter for the American Bar Association's special committee on the lawyers' ethics code; while Klipper has been a New York assistant district attorney prosecuting corporate and financial fraud, and also a corporate attorney on Wall Street. Using the Trans Union Corporation case as a watershed event for members of boards of directors, the highly-experienced legal professionals lay out the new ground rules for board members. In laying out the circumstances and facts of a number of cases; keen, concise analyses of these; and finding where and how board members went wrong, the authors provide guidance for corporate directors, top executives, and corporate and private business attorneys on issues, processes, and decisions of critical importance to them. Household International, Union Carbide, Gelco Corp., Revlon, SCM, and Freuhauf are other major corporations whose merger-and-acquisitions activities resulted in court cases that the authors study to the benefit of readers. The Boards of Directors of these as well as Trans Union and their positions with other companies are listed in the appendix. Many other corporations and their board members are also referred to in the text. With respect to each of the cases it deals with, BOARD GAMES outlines the business environment, identifies important individuals, analyzes decisions, and discusses considerations regarding laws, government regulations, and corporate practice. In all of this, however, given the exceptional legal background of the three authors, the book recurringly brings into the picture the legalities applying to the activities and decisions of board members and in many instances, court rulings on these. Passages from court transcripts are occasionally recorded and commented on. Elsewhere, legal terms and concepts -- e. g., "gross nonattendance" -- are defined as much as they can be. In one place, the authors discuss six levels of responsibility for board members from "assure proper result" through negligence up to fraud. Without being overly technical, the authors' legal experience and guidance is continually in the forefront. Needless to say, with this, BOARD GAMES is a work of importance to board members and others with the responsibility of overseeing and running corporations in the present-day, post-Enron business environment where shareholders and government officials are scrutinizing their behavior and decisions. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. TCR subscribers have free access to our on-line news archive. Point your Web browser to http://TCRresources.bankrupt.com/and use the e-mail address to which your TCR is delivered to login. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog, Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2020. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. *** End of Transmission ***