TCREUR_Public/140304.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

               Tuesday, March 4, 2014, Vol. 18, No. 62


AHS MEDICAL: S&P Puts 'B' CCR on CreditWatch Negative
AIG LIFE: Fitch Ups Rating on 3 Sub. Debentures Tranches From BB+
ALLSTATE CORP: Fitch Rates $650 Million Preferred Stock at 'BB+'
AMSTED INDUSTRIES: Moody's Rates New $500MM Unsecured Notes Ba3
AMSTED INDUSTRIES: S&P Assigns 'BB' Rating to $500MM Sr. Notes

ATHERTON BAPTIST: Fitch Affirms B+ Rating on $35.3MM Revenue Bonds
DETROIT WATER: Fitch Lowers Ratings on 4 Revenue Bond Tranches
FIRST WIND: S&P Affirms 'B-' Issuer Credit Rating; Outlook Stable
FOREST OIL: S&P Lowers Corp. Credit Rating to 'B-'; Outlook Neg.
HOST HOTELS: Fitch Raises Issuer Default Rating From 'BB+'

NISKA GAS: Moody's Rates $575MM Sr. Notes B2 & Affirms B1 CFR
ON SEMICONDUCTOR: S&P Affirms 'BB+' CCR; Outlook Stable
OSP GROUP: S&P Affirms 'B' CCR & Rates $465MM Secured Loan 'B'
PONTIAC CITY, MI: Moody's Affirms 'Caa1' Issuer Rating
PRESIDIO INC: Moody's Rates Amended Secured Debt Facilities 'B1'

PUEBLO OF SANTA ANA: Fitch Affirms BB+ Rating on $10.8MM Bonds
STUART WEITZMAN: Add-on Term Loan No Impact on Moody's B2 CFR
TAYLOR MORRISON: Moody's Assigns B2 Rating on $300MM Unsec. Notes
TAYLOR MORRISON: S&P Assigns 'BB-' Rating to $300MM Unsec. Notes
TULARE REGIONAL: Fitch Lowers Rating on $15.23MM Bonds to 'B'


AHS MEDICAL: S&P Puts 'B' CCR on CreditWatch Negative
Standard & Poor's Ratings Services placed its ratings, including
the 'B' corporate credit rating, on AHS Medical Holdings LLC on
CreditWatch with negative implications.

"The CreditWatch placement follows delays in AHS Medical's plans
to sell its Lovelace Health Plan to Health Care Service Corp., as
the transaction awaits further regulatory review," said credit
analyst David Kaplan.  "We believe the health plan is likely very
unfavorable to EBITDA and cash flow, since the mid-2013 loss of
about 30% of the customer base in the New Mexico Medicaid Managed
care program.  We believe the delay of the sale may have eroded
already thin covenant cushions, especially given a step-down in
the covenant level for the fourth quarter.  The resolution of the
sale of the health plan is a key consideration because of its
contribution to the company's underperformance, relative to our

S&P will monitor the progress of the sale of the health plan, the
effect of the plan on the company's operating performance and the
posture of the lenders with respect to covenant compliance.  In
the event that the sale is prolonged and covenants are breached,
we could lower the rating by multiple notches.  If the health plan
is sold in the near term with proceeds applied to debt reduction,
alleviating concerns over covenants, S&P could affirm the current

AIG LIFE: Fitch Ups Rating on 3 Sub. Debentures Tranches From BB+
Fitch Ratings has upgraded American International Group, Inc.'s
Issuer Default Rating (IDR) to 'A-' from 'BBB+'.  The ratings on
AIG's senior debt obligations are upgraded to 'BBB+' from 'BBB'.
The Insurer Financial Strength (IFS) ratings of AIG's rated
property/casualty insurance subsidiaries are affirmed at 'A'. The
IFS ratings of the company's U.S. life insurance subsidiaries led
by AGC Life Insurance Company are affirmed at 'A+'.

In addition the long-term senior secured ratings of securities
issued by ASIF Global Financing, ASIF II Program and ASIF III
Program were revised to 'A+' from 'A' and are also affirmed at
'A+'.  The revision brings the long-term senior secured ratings of
these entities in line with AIG Life and Retirement's IFS ratings,
which were previously upgraded on Feb. 14, 2013 and affirmed on
Aug. 8, 2013.  The Rating Outlook is Stable.

Key Rating Drivers

The holding company upgrade recognizes the continued improvement
in the organization's capital position and debt servicing
capabilities.  The company's financial leverage as measured by the
ratio of financial debt and preferred securities to total capital
(excluding operating debt and the impact of FAS 115) declined to
18% at year-end 2013 from 31% at year-end 2010. Fitch's total
financial commitment (TFC) ratio has also improved, to 1.1x at
year-end 2013 from 2.5x at year-end 2010.  The sale of aircraft
leasing subsidiary International Lease Finance Corporation (ILFC)
to AerCap Holdings N.V. that is expected to close in second
quarter 2014 will further reduce TFC to a pro forma level of
approximately 0.7x.

The upgrade of the IDR and debt ratings is also based on Fitch's
view that the improved earnings and dividend capacity of AIG's
Life and Retirement segment can support the interest and debt
service payments of the holding company.  The holding company
rating now reflects the application of standard notching between
the holding company IDR and the life operating companies' implied

AIG reported significantly improved profitability in 2013.  Net
income increased by over 160% to $9.1 billion, which corresponds
with a return on equity of 9.2%.  Pre-tax operating income was
$4.8 billion for AIG's Property Casualty segment and $5.1 billion
for Life and Retirement operations in 2013.

Earnings growth at the insurance subsidiaries and the repayment of
higher coupon debt has led to significantly improved interest
coverage.  Operating-earnings-based interest coverage on financial
debt improved to 6.7x in 2013 from 2.2x in 2012.  AIG's ability to
meet holding company obligations is primarily supported by
dividend capacity from the insurance subsidiaries.  Cash
distributions from subsidiaries totaled $8.7 billion in 2013.  The
company has built a strong holding company liquidity position that
includes $7.2 billion of unencumbered cash and investments at year
end 2013, and $4.4 billion of available capacity from credit

AIG property/casualty subsidiary ratings consider the company's
unique market position in the global insurance market given its
absolute size.  Lower catastrophe losses and benefits from recent
pricing underwriting and portfolio repositioning actions led to a
decline in the property casualty combined ratio to 101.3% in 2013
from 108.5% a year earlier.  The company's underwriting results
were affected by modest unfavorable reserve development in 2012
and 2013.  AIG's underwriting performance continues to lag large
commercial insurer peers.

The ratings of AIG's Life and Retirement subsidiaries are driven
by these entities' strong statutory capital position, more
conservative asset allocation and return to stronger operating
profits and earnings stability. The company has demonstrated that
the effects of the previous financial crisis have subsided.
Operating income has improved in 2012 and 2013 as a result of
higher fee income driven by growth in assets under management,
continued active spread management, higher investment income and
low levels of surrender activity. These positive factors are
offset somewhat by concerns as to the effect of continued very low
interest rates on product performance and future profitability.

The 'A+' senior secured notes ratings assigned to the securities
issued by ASIF Global Financing, ASIF II Program and ASIF III
Program recognizes that the obligations are secured by a funding
agreement with cash flow structures that enable the trustees to
make payments on the notes.  Thus the notes are dependent upon the
credit quality of AIG Life and Retirement and are assigned the
insurer's IFS rating.

All ratings reflect AIG's success in restructuring and
deleveraging efforts over the last five years. All government
support was repaid by AIG in 2012.  The company is now an
independent publicly held corporation with an operating focus on
global property/casualty insurance and domestic life insurance and
retirement products.

Rating Sensitivities

Key triggers that could lead to future rating upgrades include:

-- Demonstration of higher and more consistent earnings within
   Property/Casualty or Life and Retirement operating segments
   that translate into average earnings-based interest coverage
   above 10.0x. This would correspond with insurance pre-tax
   operating earnings of approximately $14 billion;
-- Further improvement in AIG's capital structure and leverage
   metrics that reduce the company's TFC ratio to below 0.5x;
-- Continued improvement in the operating earnings of the Life and
   Retirement segment which could lead to an upgrade of those
   subsidiary ratings;
-- A shift to modest sustainable breakeven or better underwriting
   results, with greater loss reserve stability or reserve
   redundancies could lead to an upgrade of property casualty
   subsidiary IFS ratings.

Key triggers that could lead to a future rating downgrade include:

-- Increases in financial leverage as measured by financial debt-
   to-total capital to a sustained level above 30%, or a material
   increase in the TFC ratio from current levels;
-- Significant reductions in debt servicing capacity from holding
   company assets and available dividends from subsidiaries to a
   level below 6x annual interest on financial debt;
-- Large underwriting losses and/or heightened reserve volatility
   of the company's non-life insurance subsidiaries that Fitch
   views as inconsistent with that of comparably-rated peers and
   industry trends;
-- Deterioration in the company's domestic life subsidiaries'
   profitability trends;
-- Material declines in risk-based capital ratios at either the
   domestic life insurance or the non-life insurance subsidiaries,
   and/or failure to achieve the above noted capital structure

Fitch has upgraded the following ratings with a Stable Outlook:

American International Group, Inc.

-- Long-term IDR to 'A-' from 'BBB+'.

AIG International, Inc.

-- Long-term IDR to 'A-' from 'BBB+';

-- USD175 million of 5.60% senior unsecured notes due July 31,
   2097 to 'BBB+' from 'BBB'.

American International Group, Inc.

-- Various senior unsecured note issues to 'BBB+' from 'BBB';

-- USD1 billion of 4.125% senior unsecured notes due Feb. 15, 2024
   to 'BBB+' from 'BBB';

-- USD1.5 billion of 4.875% senior unsecured notes due June 2022
   to 'BBB+' from 'BBB';

-- USD800 million of 4.875% senior unsecured notes due Sept. 15,
   2016 to 'BBB+' from 'BBB';

-- EUR420.975 million of 6.797% senior unsecured notes due Nov.
   15, 2017 to 'BBB+' from 'BBB';

-- GBP323.465 million of 6.765% senior unsecured notes due Nov. 15
   , 2017 to 'BBB+' from 'BBB';

-- GBP338.757 million of 6.765% senior unsecured notes due Nov.
   15, 2017 to 'BBB+' from 'BBB';

-- USD256.161 million of 6.820% senior unsecured notes due Nov.
   15, 2037 to 'BBB+' from 'BBB';

-- USD1 billion of 3.375% senior unsecured notes due Aug. 15, 2020
   to 'BBB+' from 'BBB';

-- USD250 million of 2.375% subordinated notes due Aug. 24, 2015
   to 'BBB' from 'BBB-';

-- EUR750 million of 8.00% series A-7 junior subordinated
   debentures due May 22, 2038 to 'BBB-' from 'BB+';

-- USD4 billion of 8.175% series A-6 junior subordinated
   debentures due May 15, 2058 to 'BBB-' from 'BB+';

-- GBP309.850 million of 5.75% series A-2 junior subordinated
   debentures due March 15, 2067 to 'BBB-' from 'BB+';

-- EUR409.050 million of 4.875% series A-3 junior subordinated
   debentures due March 15, 2067 to 'BBB-' from 'BB+';

-- GBP900 million of 8.625% series A-8 junior subordinated
   debentures due May 22, 2068 to 'BBB-' from 'BB+';

-- USD687.581 million of 6.25% series A-1 junior subordinated
   debentures due March 15, 2087 to 'BBB-' from 'BB+'.

AIG Life Holdings, Inc.

-- Long-term IDR to 'A-' from 'BBB+';

-- USD150 million of 7.50% senior unsecured notes due July 15,
   2025 to 'BBB+' from 'BBB';

-- USD150 million of 6.625% senior unsecured notes due Feb. 15,
   2029 to 'BBB+' from 'BBB';

-- USD300 million of 8.50% junior subordinated debentures due July
   1, 2030 to 'BBB-' from 'BB+';

-- USD500 million of 7.57% junior subordinated debentures due Dec.
   1, 2045 to 'BBB-' from 'BB+';

-- USD500 million of 8.125% junior subordinated debentures due
   March 15, 2046 to 'BBB-' from 'BB+'.

Fitch has affirmed the following ratings with a Stable Outlook:

AGC Life Insurance Company
American General Life Insurance Company
The Variable Annuity Life Insurance Company
United States Life Insurance Company in the City of New York
-- IFS rating at 'A+'.

AIU Insurance Company
American Home Assurance Company
AIG Assurance Company
AIG Europe Limited
AIG MEA Limited
American International Overseas Limited
AIG Property Casualty Company
AIG Specialty Insurance Company
Commerce & Industry Insurance Company
Granite State Insurance Company
Illinois National Insurance Company
Insurance Company of the State of Pennsylvania
Lexington Insurance Company
National Union Fire Insurance Company of Pittsburgh, PA
New Hampshire Insurance Company
--IFS rating at 'A'.

Fitch has revised and affirmed the following ratings:

ASIF Global Financing

-- USD750 million of 6.9% senior secured notes due March 15, 2032
   to 'A+' from 'A';

ASIF II Program

-- JPY10 billion of 2.7045% senior secured notes due July 23, 2014
   to 'A+' from 'A';
-- GBP200 million of 6.375% senior secured notes due Oct. 5, 2020
   to 'A+' from 'A';
-- USD82 million of 0% senior secured notes due Jan. 2, 2032 to
   'A+' from 'A'.

ASIF III Program

-- CHF150 million of 3% senior secured notes due Dec. 29, 2015 to
   'A+' from 'A';
-- GBP350 million of 5.375% senior secured notes due Oct. 14, 2016
   to A+' from 'A';
-- GBP250 million of 5% senior secured notes due Dec. 18, 2018 to
   'A+' from 'A';
-- EUR200 million of 1.66% senior secured notes due Dec. 20, 2024
   to 'A+' from 'A'.

ALLSTATE CORP: Fitch Rates $650 Million Preferred Stock at 'BB+'
Fitch Ratings has assigned a 'BB+' rating to The Allstate
Corporation's issuance of preferred stock.

Fitch currently rates Allstate's IDRs 'A-/ F1' with a Stable

Key Rating Drivers

Allstate's planned issuance of $650 million of 6.625% fixed rate
perpetual non-cumulative preferred stock (an amount excluding a
possible additional 15% overallotment) is for general corporate

Based on its rating criteria, Fitch has assigned 100% equity
credit to the preferred stock and has added an additional notch to
the rating to reflect more aggressive loss absorption features.

The security has no stated maturity.  Dividends are non-cumulative
and Allstate has the option to defer them at their discretion.  In
addition, the security has a mandatory deferral feature that
requires deferral if certain capital ratios or operating results
are breached.  Fitch believes the mandatory deferral could be
triggered before there is significant stress in the organization.
Therefore, it deems the features as having more aggressive loss

Debt-to-total capital remained appropriate for the current rating
category at 23.4% at Dec. 31, 2013 (22.8% proforma for the
preferred stock issue), relative to Fitch's median guideline of
28%.  This ratio was calculated excluding unrealized investment
gains on fixed income securities from shareholders' equity.

Fitch calculated the run-rate fixed charge coverage to be between
9-11 times based on $3.8 billion in GAAP EBIT for 2013.  GAAP EBIT
was divided by annual interest expense on the debt and pre-tax
preferred dividends, totaling approximately $440 million
(including dividends from the new stock issue).  Fitch's median
guideline for the rating category is 7.0x.

Rating Sensitivities

Key rating triggers for Allstate that could lead to an upgrade

-- Growth in surplus leading to an improved capitalization profile
   measured by operating leverage approaching 1.1x and a score of
   'Strong' or better on Fitch's proprietary capital model, Prism;

-- Reduced volatility in earnings from catastrophe losses and
   better operating results consistent with companies in the 'AA'
   rating category;

-- Standalone ratings for Allstate's life subsidiaries could
   increase if their consolidated statutory Risky Assets/TAC ratio
   falls below 100% and they are able to sustain a GAAP based
   Return on Assets ratio over 80 basis points.

Key rating triggers for Allstate that could lead to a downgrade

-- A prolonged decline in underwriting profitability that is
   inconsistent with industry averages or is driven by an effort
   to grow market share during soft pricing conditions;

-- Substantial adverse reserve development that is inconsistent
   with industry trends;

-- Significant deterioration in capital strength as measured by
   Fitch's capital model, NAIC risk-based capital and traditional
   operating leverage. Specifically, if operating leverage,
   excluding the surplus of the life insurance operations,
   approached 2.5x it would place downward pressure on ratings;

-- Significant increases in financial leverage ratio to greater
   than 30%;

-- Unexpected and adverse surrender activity on liabilities in the
   life insurance operations;

-- Liquid assets at the holding company less than one year's
   interest expense and common dividends.

Fitch has assigned the following rating:

-- 6.625% Series E preferred stock 'BB+'.

AMSTED INDUSTRIES: Moody's Rates New $500MM Unsecured Notes Ba3
Moody's Investors Service has affirmed the Ba2 Corporate Family
Rating ('CFR') for Amsted Industries Incorporated ('Amsted') and
maintained its stable outlook, as Amsted is seeking to refinance
its senior unsecured notes and replace its senior secured credit
facility. At the same time, Moody's has assigned a Ba3 rating to
the new $500 million senior unsecured notes due 2022 that Amsted
plans to issue as part of this refinancing. The ratings consider
Amsted's leading market positions in each of the company's
business segments, its strong cash flows and limited leverage,
balanced against increasing share repurchase obligations under its
Employees' Stock Ownership Plan ('ESOP').

Ratings Rationale

The Ba2 CFR for Amsted takes into account the company's leading
market positions in each of its three business segments: railroad
products, vehicular products and industrial products. Focused on
technical excellence, the company strives to grow its business
through product innovations, close relationships with its
customers and efficient manufacturing processes.

The ratings are also supported by Amsted's demonstrated ability to
generate strong cash flows, in part due to Federal income tax
benefits derived from its status as an S Corporation, as well as
management's focus on cash generation and working capital
management. With relatively moderate capital expenditure
requirements, free cash flow has been particularly strong in
fiscal 2012 and 2013: approximately $300 million and $460 million,

However, Amsted's obligations to repurchase shares from eligible
ESOP participants have increased materially, following a rapid
increase in the independently determined share value for Amsted
since the end of fiscal 2012. Consequently, Moody's considers
Amsted's ESOP exposure a principal rating constraint.

Under management's prudent financial policy, debt levels are
moderate, resulting in very strong leverage at the Ba2 CFR of only
1.8 times, measured as Debt to EBITDA for the last twelve months
ending January 4, 2014. Moody's believes that this will help the
company to sustain any adverse developments in Amsted's ESOP

The Ba3 rating for Amsted's senior unsecured notes is one notch
below the CFR of Ba2. This is due to a substantial amount of
potential senior secured debt obligations represented by the new
$400 million revolving credit facility, as well as the new $100
million senior secured term loan in Moody's Loss Given Default
Analysis ('LGD').

The stable ratings outlook reflects Moody's expectation for near-
term strengthening of end-market demand for rail freight cars,
specifically tank cars, as well as heavy duty trucks. Moody's
anticipates cash flow to be adversely affected by rights
exercisable under Amsted's Stock Appreciation Rights Plan, as the
intrinsic value of these rights has increased materially in line
with Amsted's share value. Although net cash generation could
therefore become negative in fiscal 2014, taking into account the
ESOP share repurchase obligations, Moody's expects no material
change in the company's leverage.

As leverage is currently strong relative to the Ba2 rating,
leverage is not a key driver to a higher ratings consideration.
Instead, a better balance between Amsted's ESOP repurchase needs
and the company's free cash flow generation would be a key factor
for a potential upgrade.

Ratings could be lowered if ESOP obligations rise to a level that
result in a significant increase in debt or draw on the company's
liquidity sources, particularly at a time when business conditions
were to deteriorate unexpectedly. Debt to EBITDA of over 3.0 times
or Retained Cash Flow to Debt of less than 30% could also warrant
a lower rating consideration.


Issuer: Amsted Industries Incorporated

Senior Unsecured Regular Bond/Debenture, Assigned Ba3
(LGD4, 66%)


Issuer: Amsted Industries Incorporated

Corporate Family Rating, Affirmed Ba2

Probability of Default Rating, Affirmed Ba2-PD

Senior Unsecured Regular Bond/Debenture, Affirmed Ba3 (LGD4,
62%) (to be withdrawn upon completion of cash tender offer)

Outlook Actions:

Issuer: Amsted Industries Incorporated

Outlook, Remains Stable

The principal methodology used in this rating was the Global
Manufacturing Industry published in December 2010. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.

Amsted Industries Incorporated, headquartered in Chicago,
Illinois, is a diversified manufacturer of highly engineered
components used in the railroad, vehicular, construction and
industrial sectors. The company is 100% owned by its Employee
Stock Ownership Plan ('ESOP'').

AMSTED INDUSTRIES: S&P Assigns 'BB' Rating to $500MM Sr. Notes
Standard & Poor's Ratings Services assigned its 'BB' issue-level
rating and '4' recovery rating to Chicago, Ill.-based engineered
industrial components manufacturer Amsted Industries Inc.'s
proposed $500 million senior unsecured notes due 2022.  The '4'
recovery rating indicates S&P's expectation for an average (30%-
50%) recovery in the event of a default.

As part of the transaction, the company also plans to refinance
its existing $300 million unrated revolver (undrawn at closing)
with a new unrated $400 million revolving credit facility and an
unrated $100 million term loan.  The company plans to use the
proceeds from the proposed notes and term loan to repay its
existing $500 million senior unsecured notes due 2018 and for
general corporate purposes.

The 'BB' corporate credit rating on Amsted remains unchanged.  The
outlook is stable.  S&P assess the company's business risk as
"fair," primarily reflecting its strong technical capabilities and
long-standing customer relationships, which should allow it to
maintain its good market position.  However, Amsted operates in
cyclical railcar and vehicular products end markets, where demand
can be highly volatile.

"We assess Amsted's financial risk profile as "significant."  We
expect that the company will maintain debt to EBITDA of less than
3x and funds from operation to debt of more than 30% during a
period of relatively favorable end-market conditions and sizeable
but manageable employee stock ownership plan redemptions.  In a
downturn or during periods of larger share repurchases, we do not
expect these measures to deteriorate to more than 4x or less than
20%, respectively, for a sustained period," S&P said.


Amsted Industries Inc.
Corporate Credit Rating                  BB/Stable/--

New Rating

Amsted Industries Inc.
$500 million senior unsecured notes due 2022     BB
  Recovery Rating                                 4

ATHERTON BAPTIST: Fitch Affirms B+ Rating on $35.3MM Revenue Bonds
Fitch Ratings has affirmed the 'B+' rating on approximately $35.3
million series 2010A and B bonds issued by the city of Alhambra,
CA on behalf of Atherton Baptist Homes (Atherton).  The Rating
Outlook is Stable.


The bonds are secured by gross revenue pledge, mortgage, and debt
service reserve fund.

Key Rating Drivers

Poor Operating Performance: Atherton's operating performance has
been weak with an operating ratio above 100% over the last six
years, which is extremely poor especially for a Type C contract.
Atherton posted operating ratios of 123.2% and 122.7% in fiscal
2012 and 2013, respectively compared to Fitch's 2013 type-C median
of 92.8%.  According to management, fiscal 2013 performance was
challenged by an increase in workers compensation insurance
expense due to its high claims experience as well as increased
staffing costs in its skilled nursing facility to regain its four
star designation.

Weak Management Practices: Fitch believes Atherton's poor
operating performance reflects the organization's weak management
and governance practices.  Atherton has had numerous consultant
engagements and a management report produced in 2012 highlighted
the organization's slowness to adopt industry best practices in
marketing and sales.  Although Atherton has implemented the
recommendations in the management report, concerns regarding the
management of operations remain.  The fiscal 2014 budget shows
another year of a fairly sizeable bottom line loss, which Fitch
believes is unsustainable.

Success In Courtyard Sales: Atherton's series 2010 bond issue
funded the addition of 50 independent living units (ILUs)
(Courtyard) and the slow rate of sales of the Courtyard units had
been a credit concern.  With the hiring of Greenbrier (marketing
consultant) in late 2012, the separation of sales and marketing
duties, and the hiring of a Director of Sales in early 2013, the
number of occupied units increased to 47 in the fourth quarter
2013 from 30 in the first quarter 2013.  It is expected that the
Courtyard will reach 100% occupancy by March 2014.

Focus On Increasing Occupancy In Classic Units: Occupancy in the
Classic ILUs (170 existing ILUs) dropped to 78.8% in the fourth
quarter of 2013 from 84.7% in the first quarter of 2013 due to
higher than normal attrition.  The sales and marketing teams are
focused on improving occupancy in the Classic units now that the
Courtyard units are effectively sold.  The target is to reach 91%
occupancy by the end of 2014, which Fitch believes will be

Weak Liquidity: Excluding $5.38 million of cash and investments
that are earmarked for the payoff of the majority of the remaining
series 2010B bonds, Atherton's liquidity ratios are weak with 144
days cash on hand and 24.5% cash to debt. Further, Atherton has a
liquidity covenant of maintaining at least 180 days cash on hand
beginning June 30, 2015.

Rating Sensitivities

Improved Performance Necessary: Atherton needs to demonstrate
improved financial performance over the next two years with the
testing of bond covenants, especially debt service coverage
beginning in fiscal 2015. Financial projections prepared by
Atherton's management consultant indicates improved cash flow and
relies significantly on consistent turnover entrance fee proceeds
at a much higher level than in its last six years, which Fitch
views as aggressive. However, the sales team stated that they are
on track with occupancy goals year to date.

Credit Profile

Atherton Baptist Homes is a Type C continuing care retirement
community (CCRC) located in Alhambra, CA with 170 Classic ILUs, 50
Courtyard ILUs, 38 ALU, and 99 SNF beds.  Total revenue in fiscal
2013 (Dec. 31 year end; unaudited) was $16.8 million.

Weak Financial Profile
Atherton's financial profile is characteristic of a non-investment
grade credit with a high debt burden, poor profitability, and
light liquidity.  Fitch used maximum annual debt service (MADS) of
$2.557 million, which assumes the pay down of the series 2010B
bonds.  MADS comprised 13.8% of total revenue in 2013. Atherton is
required to maintain MADS coverage of 1.2x beginning in fiscal
2015 and coverage below 1x for two consecutive years would be an
event of default.  Atherton had 1.14x coverage per bond covenant
calculation in fiscal 2013.

Historical profitability has been poor.  Atherton's fiscal 2013
budget of negative $3.8 million bottom line was in line with prior
year performance.  Actual 2013 results were better with a negative
$2.7 million bottom line only due to a $1 million unrestricted
contribution from a resident.  The fiscal 2014 budget shows a
bottom line of negative $3 million and includes the continued
pressure on workers compensation insurance expense due to higher
claims experience.  A director of human resources was hired in
early 2013 and the number of claims has been declining, however,
Atherton's claims experience is still higher than the industry

Fitch believes Atherton's management practices and governance
oversight has been a contributing factor to its poor operating
performance.  Fitch believes the budgeting of ongoing sizeable
bottom line losses is unsustainable and an inability to correct
the structural imbalance of cash operating expenses in excess of
cash operating revenue is viewed as a major credit weakness.

Success in Courtyard Sales
The Courtyard project was part of Atherton's campus improvement
plan.  The project added 50 ILUs to the existing campus and
included the renovation and upgrade of existing common facilities.
The total construction cost was $33.4 million and the Courtyard
opened on time and within budget in June 2011.  Atherton issued
$29.3 million fixed rate series 2010A bonds and $14.64 million of
series 2010B bonds to fund the project.

The series 2010B bonds are being paid down with initial entrance
fees generated from the Courtyard project and the balance as of
Dec. 31, 2013 was $6.02 million.  Management indicated that $4.38
million was paid on Jan. 1, 2014 and another $1.0 million is
expected to be paid on April 1, 2014.  The final maturity of the
series 2010B bonds is Jan. 1, 2017.  The remaining balance
(approximately $640,000) will be paid from internal funds or there
are two more Courtyard units that will generate an initial
entrance fee (average entrance fee $350,000 per unit).

At the time of Fitch's last review in March 2013, Atherton only
had 31 Courtyard units occupied, which has increased to 48 as of
February 2014.  The strong sales activity has been driven by the
changes in the sales team that has been focused on utilizing its
lead management system and holding sales staff accountable.

Focus on Improving Occupancy in Classic Units
Atherton is required to maintain occupancy in the Classic ILUs at
82.5% and failure to do so requires a consultant call in.
Solutions Advisors is now fulfilling this requirement.  High
attrition in the fourth quarter of 2013 drove occupancy in the
Classic units down to 78.8% and as of Feb. 24, 2014, occupancy was
still 78.8% but with 11 depositors scheduled to move in.  The
marketing team has several new strategies to focus on improving
occupancy and will utilize the community's 100 year anniversary as
well as a continued referral stream from existing residents.
Atherton's pricing is relative to local housing prices and the
real estate values have been trending up over the last two years.
The marketing and sales team goal for 2014 is to increase the
occupancy in the Classic units to 91% or 155 out of 170 units.
Management's financial forecast incorporates net turnover entrance
fee receipts of approximately $4 million-$5 million per year in
the forecasted period compared to $2.1 million in fiscal 2013,
$1.4 million in fiscal 2012 and $1.2 million in fiscal 2011 which
Fitch views as aggressive.

Weak Liquidity Metrics
Atherton reported unrestricted cash and investments of $12.7
million at Dec. 31, 2013, which translated to 249.4 days cash on
hand and 36.4% cash to debt.  However, these metrics are inflated
as Atherton includes the initial entrance fees as part of
unrestricted cash and investments until the proceeds are used for
the paydown of the series 2010B bonds.  With the paydown of $4.38
million of series 2010B bonds on Jan. 1, 2014 and the expected pay
down of $1.0 million on April 1, 2014, pro forma days cash on hand
and cash to debt fall to a low 144 and 24.5%, respectively.
Atherton has a liquidity covenant of maintaining at least 180 days
cash on hand starting in fiscal 2015 (tested in June and
December), however, the failure to meet the liquidity covenant
would not result in an event of default.  Projected capital needs
are approximately $1 million a year and Atherton maintains a
defined benefit pension plan that is currently underfunded.
Atherton has not been contributing to the pension plan given its
financial condition, which is viewed negatively by Fitch.

DETROIT WATER: Fitch Lowers Ratings on 4 Revenue Bond Tranches
Fitch Ratings has downgraded the following ratings on the city of
Detroit, Michigan (the city) bonds issued on behalf of the Detroit
Water and Sewerage Department (DWSD) listed below. In addition,
Fitch maintains the Rating Watch Negative on the bonds:

-- $1.1 billion senior lien water revenue bonds to 'BB+' from

-- $565 million second lien water revenue bonds to 'BB' from

-- $1.6 billion senior lien sewer revenue bonds to 'BB+' from

-- $788 million second lien sewer revenue bonds to 'BB' from


Senior lien water and sewer bonds are separately secured by a
first lien on net revenues of each water and sewer system (the
systems). Second lien bonds are separately secured by a second
lien on the net revenues of each system after payment of senior
lien bonds.


continues to exhibit weak financial performance, with fiscal 2013
unaudited results missing forecasts. Fitch believes financial
improvement over the near term is unlikely given recent disclosure
regarding the full scope of customer delinquencies. Fitch's
concerns about delinquencies are further exacerbated by the city's
status as a bankrupt entity.

UNCERTAINTY DRIVES THE WATCH: A key assumption underpinning
Fitch's ratings is that water/sewer bondholders are legally
protected from impairment under Chapter 9 given the clear intent
of the bankruptcy code to carve out debt supported by special
revenues. Nonetheless, there remains uncertainty surrounding the
city Emergency Manager's (the EM) attempt to impair system
bondholders under the city's Plan of Adjustment (the POA),
including removal of the call provision and subordination of
bondholder security interest combined with threatened reduction in
interest coupon. Fitch believes that there is no legal basis to
compel bondholders to accept such impairment as proposed in the

SEPARATE OPERATIONS: All system funds and accounts are maintained
separate and distinct from other city funds including the city's
general fund. Excess system funds are invested by the bond trustee
for and at the direction of DWSD.

HIGHLY LEVERAGED DEBT PROFILE: The systems' debt load is expected
to remain elevated for the foreseeable future. Borrowing needs for
sewers are moderate and for water, minimal.

EXPANSIVE SERVICE TERRITORY: The systems provide essential
services to a broad area. The water system covers roughly 43% of
Michigan's population, with over 70% of operating revenues coming
from wealthier suburban customers. The sewer system includes
roughly 30% of Michigan's population, with over 50% of operating
revenues coming from suburban customers.

STRONG RATE-ADJUSTMENT HISTORY: The governing body has instituted
virtually annual rate hikes in support of financial and capital
needs. While there have been recent changes in the city's
governance structure through the appointment of the EM, Fitch does
not view this change as a concern at this time.


IMPAIRMENT OF BONDHOLDERS: Fitch would almost certainly view the
court's confirmation of the POA as filed, or a similar variation
whereby bondholders are impaired, as a distressed debt exchange
leading to a ratings downgrade to as low as 'D'.

WEAKENED FINANCIAL PROFILE: DWSD's inability to maintain at least
breakeven operations would likely result in a further downgrade.

ability to consistently increase rates while improving residential
retail collections will be important in maintaining the rating.



The ratings continue to consider Fitch's view that there is
substantial protection provided to the DWSD's system debt as it
constitutes special revenue obligations under Chapter 9 of the
bankruptcy code. The ratings also consider a separation of system
funds from other city funds as required under city charter and the
bond ordinance; billing and collection of rates and charges by
DWSD; relative autonomy by the department's governing structure to
oversee the affairs of the system without undue influence by the
city; and retention of surplus funds by the system.

DWSD is an enterprise fund of the city and therefore is not
entirely free from potential city influence. Any actions taken
that directly or indirectly change this historical paradigm could
exert immediate and significant credit pressure on system bonds.


The Negative Watch continues to reflect uncertainty regarding
potential event risks related to the EM's actions that attempt to
impair DWSD bondholders. The filing of the POA is just another
step in the process but does provide more insight on exactly how
the city plans to treat all creditors.

Fitch sees no apparent reason for DWSD bondholders to accept any
impairment (including voting for the POA) given the very strong
legal position of this debt within Chapter 9 bankruptcy
proceedings. Should the POA be confirmed as filed and thereby
result in impairment to bondholders, Fitch would almost certainly
view the action consistent with a distressed debt exchange and
downgrade the rating on the bonds to 'D'.

The POA proposes various impairments to DWSD bondholders either if
a transaction transferring operation of DWSD's assets to a
regional utility authority (the GLWA) is effected or DWSD remains
a department of the city. The POA scenario that transfers
water/sewer operations to GLWA would impair the call protection of
existing non-callable bonds (class 1B and 1D claims in the case of
water and sewer bondholders, respectively) whether existing
bondholders were issued exchange bonds or the bonds were cash
defeased subsequent to confirmation of the POA. For bondholders
receiving exchange bonds, the security interest would also be
impaired, as bondholders' current security pledge would be
subordinated to a new transfer payment from GLWA to the city, with
no cap of the transfer payment specified in the POA.

Bondholders voting against the POA would be impaired as a result
of receiving different interest coupons than currently held, with
such coupons virtually guaranteed to be lower than the existing
coupons; bondholders voting for the POA may elect to receive
exchange bonds with coupons that are the same as the existing
bonds' coupons.

Impairments to bondholders under the POA scenario where DWSD
remains a department of the city are essentially identical as
under the GLWA transfer. The only exception is that existing DWSD
bonds could be reinstated prior to the effective date of the POA
as opposed to being cash defeased.


The system's fiscal 2013 audited results are unavailable. The
delay is due to unresolved issues relating to the city's
bankruptcy filing and the application of appropriate financial
accounting and related disclosures in this scenario. Recently
issued DWSD unaudited results for fiscal 2013 show all-in sewer
bond debt service coverage (DSC, including senior, subordinate and
junior lien state revolving fund debt) at 0.95x as calculated by
Fitch, well below its original projection of 1.22x. DSC for the
water bonds was slightly higher at 1.14x but also below prior
expectations of 1.29x.

The decrease in DSC is primarily due to a decline in retail and
wholesale revenues. The sewer system met its sum-sufficient rate
covenant for fiscal 2013 largely due to the bond documents'
exclusion from net revenues non-cash annual OPEB accrued expenses
(totaling $13.6 million). This approach differs from Fitch's
calculation of DSC which incorporates financial accruals. Bond
ordinance debt service coverage based on the unaudited results for
sewer was 1.02x and for water was 1.24x.

Significant delinquencies by city retail customers likely also
account for some of the revenue decline. While the system has
experienced above-average delinquencies for several years, new
delinquent account information provided by DWSD reveals the
severity of the problem. Approximately 65% of the city's
residential water and sewer customers are at least 60 days
delinquent as of Jan. 3, 2014. Fitch believes the recent
disclosure in conjunction with challenges to remedy this issue in
the already pressured operating environment supports a below
investment-grade credit profile. Management reports addressing the
delinquency problem is a top priority and has begun implementation
of more timely shut-offs.

Fitch believes the system's liquidity metrics likely remain below
average although unrestricted cash balances for fiscal 2013 have
not been fully reported. As of the most recent financial audit
(fiscal 2012), days cash on hand was a relatively low 131 days for
sewer and 183 days for water.

DWSD estimates that fiscal 2014 revenues to date are running below
budgeted levels, again, due to lower system billings. The systems'
operating expenses are estimated to be under budget as a result of
attrition and other non-personnel cuts. DSC for fiscal 2014 is
projected to total 1.3x for sewer and 1.35x for water. However,
Fitch believes DWSD may have difficulty achieving the level of
revenue growth forecasted assuming base year revenues from 2013
unaudited results. Consequently, Fitch expects fiscal 2014 DSC to
be lower than DWSD's projections, possibly significantly.

Sewer system revenues are likely to perform closer to projections
starting in fiscal 2015 because of a recently adopted process to
simplify rate setting for all suburban sewer customers. Under the
new process, suburban customers will have one fixed-rate to pay on
a monthly basis, eliminating fluctuations that are typical with
volumetric charges. Currently, volumetric charges account for
approximately 65% of the suburban sewer bill.


DWSD is poised to lose its largest wholesale customer when the 35-
year contract to sell water to Flint, MI expires on April 16,
2014. Flint accounted for $22 million (or 6%) of the system's
total billed revenue for fiscal 2013. Flint's departure from the
system is expected to happen sometime over the next three to five
years, adding pressure to DWSD's already narrow finances.

The rating assumes relative stability in the wholesale customer
base. Management maintains that there are few viable options other
than DWSD for most wholesale customers to purchase treated water.
The system's ability to absorb the revenue impact from losing its
largest customer and maintain all-in sum-sufficient DSC is key to
stability in underlying credit quality.


Fitch expects leverage for both systems to remain high for the
foreseeable future. DWSD's sewer debt profile is relatively weak
with long-term debt per customer totaling a high $3,830 for sewer
and $2,079 for water. Principal payout is slow with only 28% of
sewer debt maturing in 10 years; 26% for water.

The systems' 2015-2019 capital improvement plans (CIP) total
approximately $505 million each for water and sewer. Near-term
debt issuances totaling $128 million for sewer is expected in
fiscal 2015 with $155 million for water in fiscal 2016.

The water CIP is largely unchanged from the previous plan and the
sewer CIP reflects a 31% decrease in planned spending. Capital
cost containment reflects management efforts to preserve cash by
deferring certain projects for approximately 18 months. Management
has also planned the deferral of certain capital projects while it
completes and implements a strategic facilities plan (SFP) during
fiscal 2014. The SFP will prioritize future capital investments.


The water system is a regional provider serving around 4.2 million
people or nearly 43% of Michigan's population, including the
city's population of over 700,000. The system serves the city on a
retail basis and 124 communities through 84 wholesale contracts.
The service territory consists of an area of 138 square miles in
Detroit and 981 square miles in eight counties.

The sewer system is a regional provider serving around 2.8 million
people or nearly 30% of Michigan's population, including the city.
The system serves the city on a retail basis and 76 communities
through 22 wholesale contracts. The service territory consists of
an area of 138 square miles in Detroit and 850 square miles in
three counties.

Population and customer growth for both systems have experienced
modest annual declines for a number of years. Detroit's population
in particular has experienced continuous decline, but suburban
areas have picked up most of the migration.


The board has consistently raised rates to meet financial and
capital needs. However, unfavorable operating conditions
(including very high delinquencies) and rising fixed costs have
muted the positive revenue impact. For fiscal 2013, the board
raised charges 9.9% and 6.7% for city retail and suburban
wholesale customers, respectively. For fiscal 2014, DWSD
implemented 4% increases on July 1 and another 4% increase has
been proposed for fiscal 2015. Annual increases of 4% are
preliminarily forecast for fiscals 2016-2019.

Rate flexibility is hampered by weak income levels in the city.
Retail rates for the sewer system well exceed Fitch's 1% of median
household income (MHI) affordability benchmark (1.8%) given the
weak MHI within the city. The water system's retail rates remain
around Fitch's MHI.

FIRST WIND: S&P Affirms 'B-' Issuer Credit Rating; Outlook Stable
Standard & Poor's Ratings Services said it affirmed First Wind
Capital LLC's (FWC) issuer credit rating at 'B-'.  The outlook is
stable.  At the same time, S&P lowered the recovery rating on the
$200 million senior secured notes due 2018 ($155 million
outstanding) to '2' from '1' and the issue rating to 'B' from

In 2013, FWC reduced debt but had weaker cash flow from
operations.  Debt at the FWC level (through its debt buy-back) and
at its project-level debt (via a refinancing of the Northeast
projects to a term loan B) was reduced significantly.  The cash
received from its majority stake sale in at the Kawailoa facility,
along with American Recovery and Reinvestment Act grants received,
helped mitigate the weak wind performance in 2013 and the outage
at the Kahuku facility.  Overall, despite the decreased cash flow
from operations, the company performed slightly above Standard &
Poor's projections for 2013.

S&P's overall assessment of FWC's business risk profile is "weak".
S&P views FWC's financial risk profile as "highly leveraged".

"Although its debt/capital ratio may indicate an investment-grade
rating (we assume the debt to capital ratio remains steady at
about 55%), cash flow measures show averages that align with a
rating in the low 'B' category," said Standard & Poor's credit
analyst Jeong-A Kim.

FWC is a wholly owned subsidiary of Boston-based First Wind
Holdings LLC (FWH), a wind developer group.  There is no
independent director at FWC.  Given that FWH has no limitations on
debt and activities, FWH's credit quality remains a consideration,
and future leverage of FWH could weigh on FW Capital's ratings.
S&P has ascertained through the unaudited financial statements of
FWH that there is no debt at FWC's parent apart from a $15 million
loan from FWC and an affiliate company.  Also, as FWH's parents
are financial sponsors, the rating of FWC is capped at 'B+'.

The stable outlook reflects S&P's expectation that FWC will
maintain adequate liquidity through its cash at hand and receive
sufficient distributions from its operating projects to service
debt.  Under S&P's base-case scenario, it expects cash flows from
operating subsidiaries to cover FWC's interest expenses until the
notes' final bullet maturity in 2018, save for minor weak points
in 2015 and 2018.  S&P expects cash at FWC to appropriately cover
any minor shortfalls.

FOREST OIL: S&P Lowers Corp. Credit Rating to 'B-'; Outlook Neg.
Standard & Poor's Ratings Services said it lowered its corporate
credit rating on Denver-based Forest Oil Corp. to 'B-' from 'B+'.
The outlook is negative.

At the same time, S&P lowered the issue rating on Forest's senior
secured debt to 'B+' from 'BB'.  The recovery rating on this debt
remains '1', indicating S&P's expectation of very high (90% to
100%) recovery in the event of a payment default.  S&P also
lowered the issue rating on the company's senior unsecured notes
to 'CCC' from 'B-'.  The recovery rating on this debt remains '6',
indicating S&P's expectation of negligible (0% to 10%) recovery in
the event of a payment default.

"The negative outlook reflects the potential for a downgrade given
the heightened uncertainty of future Eagle Ford production, which
could reduce liquidity further," said Standard & Poor's credit
analyst Mark Salierno.  "A failure of the company to develop the
Eagle Ford in 2014, or lower than expected production in Arkansas-
Louisiana-Texas, could be a factor.  An inability to amend its
credit facility, given the potential for covenant violations in
mid-2014, could also lead to a downgrade."

S&P could lower the rating if liquidity deteriorated without a
clear path to improvement.  S&P could envision this scenario if
the company were unable to meet its revised production forecast
later this year, which could occur if there were further delays in
Eagle Ford development, Ark-La-Tex results fell short of
expectations, or if the company were unable to obtain an amendment
to its credit facility.

A revision to stable would be primarily based on improved
liquidity prospects and a reassessment of the company's liquidity
profile to "adequate."  S&P believes this would require a covenant
amendment before the end of the second quarter of 2014, in
addition to the company meeting or exceeding its 2014 production
targets with no additional capital spending beyond S&P's current

HOST HOTELS: Fitch Raises Issuer Default Rating From 'BB+'
Fitch Ratings has upgraded the credit ratings of Host Hotels &
Resorts (NYSE: HST) and its operating partnership, Host Hotels &
Resorts Limited Partnership (collectively Host, or the company) as

Host Hotels & Resorts, Inc.
--Issuer Default Rating (IDR) to 'BBB-' from 'BB+'.

Host Hotels & Resorts, L.P.
--IDR to 'BBB-' from 'BB+';
--Unsecured revolving credit facility to 'BBB-' from 'BB+';
--Senior unsecured notes to 'BBB-' from 'BB+';
--Senior unsecured exchangeable notes to 'BBB-' from 'BB+'.

The Rating Outlook is Stable.

Key Rating Drivers

The upgrade reflects Fitch's expectation that Host will achieve
its stated 3.0x leverage target and that the company's credit
metrics will remain appropriate for the 'BBB-' IDR through the
lodging cycle.  The upgrade also considers Host's high-quality
portfolio of geographically diversified upper tier hotel
properties, as well as its large and liquid unencumbered asset
pool.  Fitch views this as an important source of contingent
liquidity that supports the rating.

Sustained Lower Leverage
Host has reduced its leverage from its down cycle peak of 5.8x to
3.3x for the trailing 12 month period ending Dec. 31, 2013.
Fitch's base case scenario projects Host's leverage to decrease to
2.8x in 2014 and 2.5x in 2015.  This reduction and public
commitment to sustain leverage around 3.0x or below is a key
element behind Fitch's upgrade of Host's ratings.

The ratings have little tolerance for leverage sustaining above
4.0x over a rating horizon (typically two to three years).
Ratings also recognize that the cyclicality of the industry, the
asset heavy nature of owning hotels, and the limited ability to
retain cash and reduce debt due to its REIT status could cause
leverage to increase above 4.0x temporarily in a downturn.
Fitch's stress case forecast assumes that peak cyclical leverage
is comfortably below 5.0x and that it would decline to below 4.0x
within the ratings horizon.  Fitch defines Host's leverage as net
debt to recurring operating EBITDA.

Positive Hotel Industry Outlook
Fitch has a positive view towards U.S. lodging industry
fundamentals owing to healthy demand from corporate transient and
inbound international visitation trends.  Combined with limited
new supply, the increase in demand has lifted occupancy rates to
levels that support pricing flexibility.  Fitch's base case
incorporates revenue per available room (RevPAR) growth for U.S.
hotels of 5.5% in 2014, which is on the conservative side of the
5%-7% range of forecasts from the leading industry forecasting
services. Fitch expects Host's RevPAR to grow in-line to slightly
above the industry average during the next one-to-three years.

Diversified Portfolio
Host maintains a high-quality, geographically diversified
portfolio of 114 consolidated luxury and upscale hotel properties
across the U.S. including 15 international hotels located in,
Australia, Brazil, Canada, Chile, Mexico, and New Zealand.  The
company's portfolio provides significant financial flexibility and
geographically diverse cash flows, which Fitch views positively.

Large and Liquid Unencumbered Asset Pool
Host's large unencumbered asset pool provides an excellent source
of contingent liquidity.  Fitch calculates that the company's
unencumbered assets to net unsecured debt (UA/UD) ratio at 2.3x as
of Dec. 31, 2013.  Fitch reflects the cyclicality of Host's cash
flows in its UA/UD analysis by haircutting its trailing 12-month
unencumbered EBITDA by 20% and applying a stressed 8x multiple to
calculate unencumbered asset value.

Host's unencumbered asset profile has several attractive features
that should enhance their appeal as collateral.  The company's
hotels are principally located in key 'gateway' markets that
balance sheet lenders tend to favor.  Moreover, its hotels are
generally aligned with the strongest brands in the industry.
Finally, Host owns some of the largest and most valuable hotels in
the U.S., which should allow it to raise secured debt capital
quickly and in size, if needed.

Strong Fixed-Charge Coverage
Fitch projects that Host's fixed-charge coverage ratio, which
declined to 1.7x in 2009 from 2.6x in 2008 and rose to 3.2x in
2013, to improve to 5.1x in 2014 and 5.6x in 2015.  Under Fitch's
stress case forecast coverage would decline to 2.5x over the next
12-to-24 months.  Fitch defines Host's fixed-charge coverage as
recurring operating EBITDA less renewal and replacement capital
expenditures, divided by cash interest expense and capitalized

Industry Cyclicality Reduces Cash Flow Stability
The cyclical nature of the hotel industry is Fitch's primary
credit concern related to Host.  Hotels re-price their inventory
daily and, therefore, have the shortest lease terms and least
stable cash flows of any commercial property type.  Economic
cycles, as well as exogenous events (i.e. acts of terrorism), have
historically caused material declines in revenues and
profitability for hotels.

The Stable Outlook centers on Fitch's expectation that Host's
credit profile will remain appropriate for the 'BBB-' rating
through the economic cycles, barring any significant changes in
the company's capital structure plans.  The Stable Outlook also
reflects the quality of Host's portfolio and unencumbered asset
coverage that provides good downside protection to bondholders.

Rating Sensitivities

-- A reduction in Host's public stated leverage target of 3.0x and
   commensurate deleveraging of its balance sheet could lead to
   positive momentum.  At this point, Fitch believes this is
   unlikely given the company's growth strategy and historical
   financial policies.

-- Fitch expects management to support its balance sheet at a
   level commensurate with a 'BBB-' rating. Host revising its
   medium to long-term leverage target above 3.0x could have
   negative rating implications.

-- Fitch's expectation for leverage to sustain above 4.0x over the
   rating horizon could also lead to a downgrade in the ratings
   and/or outlook;

-- A negative rating action could also occur if a downturn is more
   severe than Fitch's stress case scenarios, which contemplates
   industrywide RevPAR declines of 13-15%.  Due at least in part
   to the more attractive supply growth environment relative to
   the last recessions, we believe RevPAR declines would be
   somewhat less severe than the 20% declines experienced in 2008
   - 2009.

-- A material reduction in Host's UA/UD ratio could have negative
   rating implications.

NISKA GAS: Moody's Rates $575MM Sr. Notes B2 & Affirms B1 CFR
Moody's Investors Service, assigned a B2 rating to Niska Gas
Storage Canada ULC's proposed $575 million senior unsecured notes.
Niska Gas Storage Canada ULC's is a wholly-owned subsidiary of
Niska Gas Storage Partners LLC (Niska). Niska's Corporate Family
Rating (CFR) of B1, Probability of Default Rating (PDR) of B1-PD
and Speculative Grade Liquidity rating of SGL-3 were affirmed. The
rating outlooks are stable.

The proceeds from the notes offering will be used to call the $644
million of senior unsecured notes currently outstanding.


Issuer: Niska Gas Storage Canada ULC

Senior Unsecured Regular Bond/Debenture, Assigned B2

Senior Unsecured Regular Bond/Debenture, Assigned a range of
LGD5, 70 %

Outlook Actions:

Issuer: Niska Gas Storage Canada ULC

Outlook, Changed To Stable From Rating Withdrawn

Issuer: Niska Gas Storage Partners LLC

Outlook, Remains Stable


Issuer: Niska Gas Storage Partners LLC

Probability of Default Rating, Affirmed B1-PD

Speculative Grade Liquidity Rating, Affirmed SGL-3

Corporate Family Rating, Affirmed B1

Ratings Rationale

Niska's B1 CFR is driven by the cash flow volatility from its
natural gas arbitrage business, large distributions to
shareholders, high leverage, and only about 55% of revenue coming
from fee-based contracts. The rating recognizes that Niska has
historically not lost money on its arbitrage business, even though
recent cash flow has been materially reduced due to a narrowing of
the price of summer gas purchased versus the winter gas sold.
Niska's storage locations are also strategically important to the
natural gas industry.

In accordance with Moody's Loss Given Default methodology, the
$575 million senior unsecured notes are rated one notch below the
B1 CFR because of the existence of the prior-ranking $400 million
senior secured revolver.

The SGL-3 Speculative Grade Liquidity rating reflects adequate
liquidity through the end of fiscal year 2015 (March 31, 2015). At
December 31, 2013, Niska had minimal cash and $240 million
available, after $34 million in letters of credit, under its $400
million senior secured borrowing base revolver, which matures in
2016. The revolver is available in the amount of $200 million each
to AECO Gas Storage Partnership and Niska Gas Storage US, LLC.
Moody's expect positive free cash flow of about $55 million
through FY2015. Moody's expect Niska to remain compliant with the
fixed charge coverage ratio (1.1x) under its revolver that governs
the ability to draw more than 85% of the revolver commitment
through this period. The company has no major debt maturities.
Niska has little in the way of non-core assets that could be sold.

The stable outlook assumes that the compression in summer-winter
spreads has bottomed and adjusted EBITDA will remain at about $140
million, including $11 million of Moody's standard adjustments,
and that third-party term contracts continue to comprise about 75%
of storage capacity.

The rating could be upgraded if debt to EBITDA, when inventory
borrowings are low, is likely to be sustained below 3.5x. An
upgrade would also be contingent on contracting at least 80% of
storage capacity and if there was a greater reliance on fee-based
contracts for revenue.

The rating could be downgraded if debt to EBITDA , when inventory
borrowings are low, is likely to be sustained above 5x. A
consistent reliance on the arbitrage business for more than 30% of
storage capacity or debt funded distributions could also lead to a

The principal methodology used in this rating was the Global
Midstream Energy published in December 2010. Other methodologies
used include Loss Given Default for Speculative-Grade Non-
Financial Companies in the U.S., Canada and EMEA published in June

Niska is a Calgary, Alberta-based natural gas storage master
limited partnership, which owns approximately 242 billion cubic
feet (Bcf) of storage capacity in depleted natural gas reservoirs.

ON SEMICONDUCTOR: S&P Affirms 'BB+' CCR; Outlook Stable
Standard & Poor's Ratings Services affirmed its 'BB+' corporate
credit rating on Phoenix-based ON Semiconductor Corp.  The outlook
is stable.

S&P also affirmed the 'BB+' corporate credit rating on subsidiary
Semiconductor Components Industries, LLC.

At the same time, S&P affirmed its 'BB+' issue-level rating on the
company's existing $357 million convertible senior subordinated
notes due 2026.  S&P has revised the recovery rating on the
convertible senior subordinated notes to '4' from '3', indicating
S&P's expectation of average (30% to 50%) recovery for lenders in
the event of a payment default.  This reflects a large increase in
capacity under the revolver, which is senior to the subordinated
notes, resulting in a lower recovery on the latter.

The corporate credit rating on ON reflects a combination of the
company's "fair" business risk profile and "modest" financial risk
profile under S&P's criteria offset by a one notch negative
adjustment for "comparable rating analysis."  Standard & Poor's
views ON's business risk profile as "fair."  The company is a
vertically integrated manufacturer of logic, power, and analog
integrated circuits and discrete semiconductors.

"The analog and discrete markets remain highly fragmented, but ON
maintains leadership in certain submarkets, especially in high
performance, energy-efficient products," said Standard & Poor's
credit analyst Andrew Chang.  "However, most of the company's
products are subject to a high degree of volume cyclicality and
price pressures.  The acquisition of SANYO Semiconductor in 2011
increased ON's scale and enhanced its transition to a more
proprietary analog provider, but a cyclical downturn in the market
coupled with natural disasters severely impacted ON's financial
performance during the past two years," added Mr. Chang.

Looking ahead, S&P expects material improvement over the
intermediate term based on stabilization of the System Solutions
Group (SSG, ex-Sanyo) business and a strong pipeline of design
wins entering 2014.  Specifically, S&P expects above-industry-
average growth in automobile, industrial, and communication end
markets to drive mid-single-digit growth overall for fiscal 2014.
S&P also expects about a two point improvement in the EBITDA
margin, to near 19%, based on restructuring efforts and SSG

OSP GROUP: S&P Affirms 'B' CCR & Rates $465MM Secured Loan 'B'
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on New York City-based OSP Group Inc.  The outlook
is stable.

"At the same time, we assigned a 'B' issue-level rating with a '3'
recovery rating to the company's $465 million first-lien secured
term loan due 2021.  The '3' recovery rating indicates our
expectation of meaningful (50% to 70%) recovery in the event of a
payment default.  We also affirmed our 'CCC+' issue-level rating
with a '6' recovery rating on the $145 million second-lien secured
term loan (with $40 million of incremental debt added), also due
2021.  The '6' recovery rating indicates our expectation for
negligible (0% to 10%) recovery of principal in the event of a
payment default.  We will withdraw the ratings on the existing
$374 million first-lien term loan once the transaction has
closed," S&P added.

According to the company, it will use the incremental debt to
refinance the existing first-lien debt, fund a $147 million
dividend to shareholders, including financial sponsors Charlesbank
Capital Partners LLC and Webster Capital, and to pay the fees and
expenses related to the transaction.

"The affirmation reflects our reassessment of OSP's business risk
profile to "weak" from "vulnerable" and financial risk profile to
"highly leveraged" from "aggressive".  We believe management
successfully managed the carve out from PPR S.A., expanding both
gross and EBITDA margins more than we had previously anticipated
due to a variety of strategic initiatives focusing on increasing
profitability and growing revenues with better analytics in
customer outreach and retention," said credit analyst Kristina
Koltunicki.  "All of these factors contribute to our revision of
the business risk profile score.  Offsetting these enhancements is
the financial sponsor's willingness to continue increasing the
company's leverage for additional dividends.  The transaction
moderately increases debt and we believe credit protection
measures could remain elevated if performance is not as robust as
we anticipate over the next 12 months."

The stable outlook reflects S&P's expectation that credit
protection measures will remain in line with current levels over
the next 12 months as further performance gains will be offset
with incremental debt.  S&P expects OSP will continue to leverage
sales and generate EBITDA gains, which will be offset by
additional debt-financed dividends.

                          Upside scenario

S&P could raise the rating if sales increase in the high-single
digits and gross margin increases about 200 basis points (bps) in
the next 12 months.  This scenario could arise from an enhanced
merchandise offering that leads to an increase in sales ahead of
S&P's projections.  This would allow the company to better
leverage its technology infrastructure, resulting in total debt to
EBITDA in the low-4x area.  An upgrade would also be predicated on
S&P's view that financial policies have moderated and credit
protection measures would be sustainable at those levels.  At that
point in time, S&P believes this is unlikely, given the company's
financial sponsor ownership.

                         Downside scenario

S&P could lower its ratings if operating performance weakens,
leading to gross margin erosion of approximately 150 bps below its
expectations and flat sales growth.  Under this scenario, leverage
would increase to about 6x.  S&P could also lower the ratings if
the company's financial policies become more aggressive, such as
through another debt-financed dividend to its sponsors that would
increase leverage to a similar level.

PONTIAC CITY, MI: Moody's Affirms 'Caa1' Issuer Rating
Moody's Investors Service has affirmed Pontiac City School
District's Caa1 issuer rating and Caa2 General Obligation Limited
Tax (GOLT) debt rating. The outlook remains negative. The district
has $13.7 million of rated GOLT debt outstanding, which is secured
by the district's GO pledge subject to limitations on operating

Moody's ratings represent expected loss, encompassing both default
probability and bondholders' likely post-default recovery. When a
security is in or approaching default, then placement of the
rating will largely depend on the expected recovery to
bondholders. Ratings of defaulted bonds with expected recoveries
of 65-95% will typically be in the Caa range, 35-65% at Ca, and
under 35% at the lowest rating of C. In the rare case when
expected recoveries exceed 95%, such ratings will be in the single
B range.

Summary Ratings Rationale

The Caa1 issuer rating reflects the severe financial challenges
facing the district, which could again disrupt district operations
and its ability to meet ongoing obligations including debt
service. The district has begun to repay a debt service payment
that was missed on May 1st, 2013. The district's highly distressed
financial profile is characterized by a General Fund deficit of
unusual magnitude, pressured cash flows, and unrelenting
enrollment declines that have decimated district revenues. The
Caa2 rating on the district's outstanding GOLT debt is one notch
below the issuer rating, reflecting limitations on the ability to
increase operating revenues from which GOLT debt service is paid.
The negative outlook is based on the district's declining
enrollment trend driven by an outmigration of students to
neighboring districts and intense competition from charter
schools. Continued enrollment declines will pressure district
revenues, which would likely slow the district's progress towards
elimination of its accumulated deficit and impede its ability to
maintain sufficient cash flow for operations. The district does
not have the flexibility to increase its operating revenues beyond
its state allocated per pupil foundation funding.


Modest debt burden supported by rapid amortization

Implementation of significant expenditure reductions

District has begun to repay missed debt service payment

Placement of Tax Anticipation Note providing short-term cash
flow relief


History of extremely stressed liquidity leading to a debt
service default and large backlog of unpaid debts

Precipitous enrollment declines that have eroded district

History of poor financial management practices including
borrowing from the debt service funds for operations

Large structural imbalances in district financial operations
resulting a General Fund deficit of unusual magnitude

Limited revenue raising flexibility with high dependence on
state foundation allowance

Severely stressed tax base with sizable valuation declines

Substantial outstanding capital needs


The negative outlook is based on the district's continuing
declining enrollment trend driven by an outmigration of students
to neighboring districts and intense competition from charter
school operators. Continued enrollment declines will pressure
district revenues, which would slow the district's progress
towards elimination of its accumulated deficit and impede its
ability to maintain sufficient cash flow for operations. The
district does not have the flexibility to increase its operating
revenues beyond its state allocated per pupil foundation funding.

What Could Change The Rating Up (or removal of the negative

Repayment of missed debt service payment in full

Continued improvement to liquidity and cash flow

Reduced reliance on cash flow borrowing to fund operations

Return to balanced financial operations resulting in a reduction
in the General Fund deficit

What Could Change The Rating Down

Failure to fully repay missed debt service payment and make
upcoming debt service payments

Inability maintain sufficient cash flow for operations due to
failure to secure emergency loan or other factors

Increase in likelihood of bankruptcy filing

Principal Methodology

The principal methodology used in this rating was US Local
Government General Obligation Debt published in January 2014.

PRESIDIO INC: Moody's Rates Amended Secured Debt Facilities 'B1'
Moody's Investors Service affirmed Presidio, Inc.'s B1 corporate
family and B1-PD probability of default ratings ("CFR" and "PDR",
respectively) and assigned B1 LGD3-43% ratings to Presidio's
proposed amended senior secured credit facilities. The proceeds
from the upsized term loan borrowings will be used primarily to
refinance outstandings under Presidio's existing term loan and to
pay a $215 million dividend to the company's owners. Upon the
completion of the transaction, the ratings on the existing senior
secured credit facility will be withdrawn. The rating outlook is

Ratings Rationale

Although the proposed financing elevates Presidio's financial
leverage, with adjusted debt to EBITDA (incorporating Moody's
standard adjustments) rising to about 4.1 times pro-forma for the
dividend payout, Moody's recognizes Presidio's near-national
geographic footprint and improved positioning of its high-end
products as supportive of the ratings. The company's efforts to
enhance its specialization capabilities across product categories
in data center, virtualization, networking and security
deployments provide good long term growth prospects to sell
technology solutions to small and medium sized businesses.
Although one OEM vendor (Cisco) accounts for the majority of its
revenue, the company has been expanding its partnerships with
other leading technology vendors such as EMC, VMware, Oracle and
IBM. In addition, the prospect of future, debt funded acquisitions
to drive revenue growth, and smaller scale compared to competing
technology services and managed services firms temper the rating.

The stable outlook reflects Moody's expectation that Presidio will
maintain its market position serving mid-sized business customers,
generate revenue growth, and produce consistent levels of
operating profits and cash flows, with commensurate debt

Moody's expects Presidio to maintain good liquidity with rising
free cash flow levels over the next year combined with external
liquidity from a $52.5 million revolving credit facility and a
$150 million accounts receivable (A/R) securitization facility,
which will be undrawn at closing. Moody's expects Presidio to
maintain minimal cash balances, as excess cash is generally swept
on a daily basis to reduce outstanding borrowings or invested in
overnight funds. Moody's expects the company to generate solid
free cash flow over the next 12 months.

The ratings for Presidio's debt instruments reflect both the
overall probability of default of the company, to which Moody's
has assigned a PDR of B1-PD, and an average recovery. The $52.5
million senior secured revolver and $600 million senior secured
term loan represent a significant increase in this class of debt
in the capital structure, and are rated in line with the CFR at
B1-LGD3-43%. The senior secured debt instruments benefit from the
collateral package and the full and unconditional guarantee by
Presidio's domestic subsidiaries. However, the relatively large
$150 million accounts receivables securitization program enjoys a
preferential collateral position, while a fairly high level of
payables (which could collapse over time) with the company's key
partner Cisco removes the junior capital support to the senior
secured debt.

As the company is increasing its financial leverage to fund a
shareholder distribution, a rating upgrade is unlikely over the
next 12-18 months. The rating could be upgraded if the company
executes in its strategy and pays down debt leading to sustainably
lower levels of adjusted debt to EBITDA below 3 times (after
Moody's standard adjustments) while achieving organic revenue
growth consistent with industry levels and without pressuring
operating margins.

The ratings could be downgraded if the company does not achieve
expected revenue and EBITDA growth levels, from factors that might
include weak economic conditions, increased customer churn, poor
execution, or heightened competition. In addition, negative rating
pressure could arise from higher debt to EBITDA in excess of 5.0x
(after Moody's standard adjustments) or, liquidity weakens which
could arise from operating losses, dividend payments, or cash
acquisitions without a proportionate increase in EBITDA. A
deteriorating relationship with key suppliers, Cisco and EMC
especially, could also place downward pressure on the rating.

The assigned ratings are subject to review of final documentation
and no material change in the terms and conditions of the
transaction as advised to Moody's.

Rating actions:

Corporate Family Rating -- Affirmed B1

Probability of Default Rating -- Affirmed B1-PD

The following ratings were assigned:

$600 Million Senior Secured Term Loan due 2017-B1 (LGD3-43%)

$52.5 million Revolving Credit Facility due 2017-B1 (LGD3-43%)

The following ratings will be withdrawn upon completion of the new

$380 Million Senior Secured Term Loan due 2017 -- Ba3 (LGD3-30%)

Based in Greenbelt, MD, Presidio, Inc. is a provider of
information technology (IT) infrastructure and services focused on
data center, virtualization, network communications, security,
mobility and contact centers for commercial and government clients
within the U.S. The company is 87% owned by private equity firm,
American Securities. Moody's expects revenue to be about $2.4
billion over the next twelve months.

The principal methodology used in this rating was Global Business
& Consumer Service Industry Rating Methodology published in
October 2010. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.

PUEBLO OF SANTA ANA: Fitch Affirms BB+ Rating on $10.8MM Bonds
Fitch Ratings has affirmed the 'BB+' rating on approximately $10.8
million of Pueblo of Santa Ana's (Santa Ana) outstanding
enterprise revenue bonds.  Fitch has also affirmed Santa Ana's
Issuer Default Rating (IDR) at 'BB'.  The Rating Outlook is

Key Rating Drivers:

Financial Profile

The 'BB' IDR reflects the strong financial flexibility of Santa
Ana's enterprises and the stable market position maintained by
Santa Ana's gaming enterprise in the competitive Albuquerque
market.  The Pueblo's Santa Ana Star casino continues to garner
around 16% market share in the Albuquerque market based on state
reported net slot win through the end of Sept. 30, 2013 (market
share excludes the Downs racetrack casino).

Santa Ana's enterprises grew revenue by 1% in calendar 2013 and 5%
in calendar fourth-quarter 2013 over the respective prior year
periods.  Santa Ana's revenue growth benefitted from the
completion of a remodel of Santa Ana Star casino, which was
finished in the calendar second-quarter 2013 and increased the
casino floor capacity.

Santa Ana's revenues outperformed other tribal casinos in the
Albuquerque market as it was less affected by a casino expansion
at the Downs, which opened in August 2013 with 700 slot machines.
In calendar third-quarter 2013, the last quarter reported by the
state, Santa Ana's slot revenues grew 1% relative to a 4% market-
wide decline (excluding the Downs).  Santa Ana is more cushioned
against competition relative to its market peers as it focuses on
the locals business in city of Rio Rancho, located northwest of
Albuquerque, whereas the other casinos draw from the wider
Albuquerque area.

Calendar 2013 and calendar fourth quarter 2013 EBITDA increased by
3% and 9%, respectively, showing solid revenue flow-through. Fitch
expects low-to mid-single digit revenue and EBITDA growth for
fiscal year ending Sept. 30, 2014.  The growth will be driven by
the recently completed remodel, which will anniversary in the
fiscal third quarter, and easy comparisons to fiscal 2013, when
Santa Ana Star experienced construction-related disruption.
Beyond fiscal 2014 Fitch expects low-single digit revenue growth,
which is consistent with Fitch's lackluster outlook for U.S.
regional gaming markets.

Santa Ana's enterprises consist of the Santa Ana Star casino, a
separate Hyatt-managed hotel and two golf courses, with the casino
comprising 93% of total enterprises' EBITDA in the latest 12 month
(LTM) ended Dec. 31, 2013..

Santa Ana enterprises' debt to LTM EBITDA was 0.6 times (x) at
Dec. 31, 2013 and EBITDA and pledged tribal tax coverage of
interest and principal was 5.1x. The improvement in credit metrics
should continue as Santa Ana's debt amortizes quickly although the
tribe may consider a larger facility expansion at some point,
which may modestly pressure the credit metrics.

Liquidity and Financial Flexibility

Cash at the enterprise level remains well in excess of the amount
needed for day-to-day operating purposes including casino cage
cash, and the enterprises typically generate positive free cash
flow after accounting for capital expenditures and transfers to
the tribal government (2013 was an exception given remodelling-
related capital expenditures).  In contrast, many Native American
gaming credits exhibit free cash flow close to zero after
transfers to tribal government.  To Fitch's best knowledge, the
Pueblo does not distribute per cap payments to its members,
enabling for additional flexibility with respect to governmental
budgeting and enterprise transfers to the tribe.  Pueblo Santa Ana
does not provide tribal financials or tribal budgets, which
negatively affects the ratings.  Partially mitigating this non-
disclosure is the maintenance of tribal liquidity at the
enterprise level.

There are no bullet maturities within Santa Ana's capital
structure.  Santa Ana may pursue further capital projects;
however, Santa Ana's strong financial profile can support a
moderate amount of additional debt that may accompany the
potential related capital spending without pressuring the 'BB'

Revenue Bonds

The one notch differential on the revenue bonds from the IDR takes
into account a senior security interest in the enterprises' net
revenues and certain tax revenue of the tribe.  The pledged
revenues are subject to a trustee directed flow of funds if debt
service coverage by EBITDA and pledged taxes is less than 2.0x. In
addition, should debt service coverage dip below 2.0x,
distribution to the tribe is restricted to an amount necessary to
meet the essential government services budget.  Further supporting
the rating is the Pueblo's limited ability to incur additional
pari passu debt, which is limited by the bonds' covenants to $10
million ($20 million when including separate carveouts for FF&E
debt and 'short-term debt').

Rating Sensitivities

Increased disclosure with respect to the tribe's financial profile
and policies could potentially result in positive rating pressure
although the IDR is largely capped in the 'BB' category given the
business risk associated with operating a single site facility in
a competitive market.

Santa Ana's strong financial profile can absorb considerable
stress before there would be rating pressure at 'BB' IDR.
However, future developments that may, individually or
collectively, lead to negative rating action include:

-- Increase in leverage to 2x or above, likely as a result of a
   debt funded expansion; and/or

-- Sharp operating pressure stemming from a recession and/or
   intensifying competitive pressure such that leverage starts to
   approach 2x and/or the tribe is required to use the
   enterprises' cash on hand to supplement distributions.

Fitch affirms Pueblo of Santa Ana ratings as follows:

-- IDR at 'BB';
-- Enterprise revenue bonds at 'BB+'.

STUART WEITZMAN: Add-on Term Loan No Impact on Moody's B2 CFR
Moody's Investors Service said that the increase in Stuart
Weitzman Acquisition Co LLC's New Senior Secured Term Loan from
$220 million to $250 million is a credit negative but will have no
effect on the company's B2 Corporate Family Rating, the B2 rating
assigned to the secured term loan or the stable outlook. The
announcement will result in a modest increase in the company's
overall debt burden and reduces Sycamore Partners LLC's, the
acquirer of Stuart Weitzman, equity contribution from 43% to 35%
of the company's purchase price. As a result of the announcement
the company's quantitative credit profile will remain weak for the
B2 rating level for the next 12 months. Any additional equity
extractions in the near future would likely result in a negative
credit action.

TAYLOR MORRISON: Moody's Assigns B2 Rating on $300MM Unsec. Notes
Moody's Investors Service assigned a B2 rating to Taylor
Morrison's proposed $300 million of senior unsecured notes due
2024, proceeds of which will be used for growth capital and
general corporate purposes, including land acquisition and
development. At the same time, Moody's affirmed all other ratings
of Taylor Morrison Communities, Inc. (a U.S. issuer) and those of
its Canadian co-issuer, Monarch Communities Inc. (collectively,
"Taylor Morrison"), including the B1 corporate family rating, B1-
PD probability of default rating, B2 rating on the existing $1.035
billion of senior unsecured notes, and SGL-2 speculative grade
liquidity rating. The rating outlook was changed to stable from

The following rating actions were taken:

$300 million senior unsecured notes due 2024, assigned a B2,
(LGD4, 65%);

Corporate family rating, affirmed at B1;

Probability of default rating, affirmed at B1-PD;

$485 million (remaining balance) of 7.75% senior unsecured notes
due 4/15/2020, affirmed at B2, (LGD4, 65%)

$550 million of 5.25% senior unsecured notes due 4/15/2021,
affirmed at B2, (LGD4, 65%);

Speculative grade liquidity rating is SGL-2;

The rating outlook is stable.

The change in outlook to stable from positive recognizes that
Moody's are unlikely to upgrade Taylor Morrison in the next 12
months. While operating performance, which has been stellar, has
been in line with or better than our expectations, adjusted debt
leverage remains elevated and higher than Moody's expected when
Moody's went positive on the outlook last April. Given the
company's growth expectations, Moody's do not anticipate that debt
leverage will be more than very modestly reduced from current

Ratings Rationale

The B1 corporate family rating reflects the company's track record
of profitability and solid gross margin performance; good
geographic diversity, including a strong presence in Canada; and a
Canadian legacy land position that appears to be realistically
valued. At the same time, the rating incorporates the company's
elevated pro forma adjusted homebuilding debt leverage of 54.7%
(based on a $300 million size for the new offering), limited time
as an independent, stand-alone entity; the negative cash flow from
operations that Moody's is projecting for the coming year; the
lumpiness in the company's projected revenues and earnings as a
result of its high-rise exposure in Toronto; a U.S. housing market
attempting to regain its former momentum after a seven month pause
in its formerly rapid growth trajectory; and a Canadian housing
market also struggling for traction.

The stable outlook reflects our expectation that the company will
continue showing growing profitability but will be able only to
gradually reduce its adjusted homebuilding debt to capitalization
to the low 50% levels. The outlook also assumes that the company
will maintain adequate liquidity and prudently manage its land

The SGL-2 liquidity rating, which indicates that the company's
liquidity for the next 12-18 months is expected to be good,
balances the company's respectable pro forma unrestricted cash
balance of about $685 million, the lack of any material debt
maturities before 2020, and the availability under its $400
million unsecured revolver due April 12, 2017 against its cash
burn projected for 2014 and the requirement to comply with
maintenance covenants in the revolver.

The company's proposed new as well as existing senior unsecured
notes are notched below the corporate family rating because of the
sizable proportion of secured debt and debt-like obligations in
its capital structure. The notes will be guaranteed on a senior
unsecured basis by Taylor Morrison Holdings, Inc. (the direct
parent of Taylor Morrison Communities, Inc.), TMM Holdings Limited
Partnership (the indirect parent of Taylor Morrison Communities,
Inc. and direct parent of Monarch Communities Inc.), Monarch
Parent Inc. and certain existing and future U.S. subsidiaries of
Taylor Morrison Communities, Inc. as described in this offering
memorandum. The subsidiaries of Monarch Parent Inc. will not
guarantee the notes.

The ratings could be considered for an upgrade if the company
improves its scale and geographic diversity, reduces adjusted
homebuilding debt to capitalization to nicely below 50% on a
sustained basis, and maintains good liquidity. Importantly, the
company would also need to resolve its ultimate ownership, as
private equity-owned companies typically do not achieve Ba rating

The ratings could be pressured if the company becomes
unprofitable, its adjusted homebuilding debt to capitalization
rises above 60%, homebuilding interest coverage falls below 2.0x
and remains there for an extended period of time, or if liquidity

TMM Holdings Limited Partnership was formed in July 2011 by the
private equity companies, TPG Capital, Oaktree Capital Management,
and JH Investments when they acquired the North American
operations of Taylor Wimpey plc, a UK homebuilder. The North
American business of Taylor Wimpey plc included Taylor Morrison
Communities in the U.S. and Monarch Corporation in Canada.

Headquartered in Scottsdale, Arizona, Taylor Morrison builds homes
and develops master planned communities in the U.S. and engages in
high-rise and low-rise residential development in Canada. For
2013, the company generated approximately $2.3 billion in total
revenues and $297 million of pretax income before non-recurring

The principal methodology used in this rating was the Global
Homebuilding Industry published in March 2009. Other methodologies
used include Loss Given Default for Speculative-Grade Non-
Financial Companies in the U.S., Canada and EMEA published in June

TAYLOR MORRISON: S&P Assigns 'BB-' Rating to $300MM Unsec. Notes
Standard & Poor's Ratings Services said it affirmed all its
ratings on Taylor Morrison Home Corp., including its 'BB-'
corporate credit rating on the company.  The outlook is stable.
At the same time, S&P assigned a 'BB-' unsecured debt rating to
the proposed offering of $300 million of senior unsecured notes
due 2024.  The company plans to use proceeds from the notes for
general corporate purposes, including land acquisition and

"Our stable outlook on Taylor Morrison reflects our expectation
for continued growth in U.S. home deliveries and steady
performance from Canadian operations, including the successful
completion of several high-rise towers in the greater Toronto
area," said Standard & Poor's credit analyst Jaime Gitler.  "We
anticipate the company will realize high-single-digit growth in
average sales price as the delivery mix continues to shift toward
more affluent buyers.  We believe that leverage will hold steady
at about 4x debt to EBITDA."

S&P could consider lowering its rating to 'B+' if growth is more
heavily debt financed (such that debt to EBITDA rises above 5.0x)
or if the company stumbles, either as it attempts to integrate a
large acquisition or continues to expand.

S&P would consider raising the rating if the private-equity
sponsors sell their stake down below a majority position and if
EBITDA strengthens such that leverage improves to the low-3.0x
area.  However, S&P currently considers the possibility of lower
leverage to be less likely because it thinks any additional upside
in U.S. housing demand could prod Taylor Morrison to raise
additional debt capital to continue to grow.

TULARE REGIONAL: Fitch Lowers Rating on $15.23MM Bonds to 'B'
Fitch Ratings has downgraded to 'B' from 'B+' the rating on
$15,230,000 series 2007 fixed rate bonds issued by the Tulare
Local Health Care District d/b/a Tulare Regional Medical Center
(TRMC).  The bonds have been placed on Rating Watch Negative.


Debt payments are secured by a pledge of the gross revenues of
Tulare Local Health Care District. A fully funded debt service
reserve fund provides additional security for bondholders.


SUSTAINED OPERATING LOSSES: The downgrade to 'B' reflects a
continued trend of operating losses driven by declining revenues
from persisting challenges in patient utilization. Operating
losses were sustained in the fiscal year ended (FYE) June 30, 2013
and through the interim period ended Dec. 31, 2013, though
somewhat improved from 2012 levels. Due to negative cash flow,
TRMC violated its debt service covenant in fiscal 2012, and a
'going concern' was expressed in the last two audited financial

VERY WEAK LIQUIDITY: TRMC's liquidity position is very weak,
resulting from negative cash flow and complications with its
ongoing construction project. Unrestricted cash and investments
were $6.3 million at Dec. 31, 2013 compared to $10.5 million at
Dec. 31, 2012 and $24.4 million at FYE 2010. Management indicated
that a large part of the decline through the interim period was
due to timing of intergovernmental transfers (IGTs), and reported
an unrestricted cash balance of $9.8 million at the end of Feb.

management agreement with HealthCare Conglomerate Associates
(HCCA), an organization that was formed specifically to address
operational and construction challenges at TRMC. HCCA recruited a
number of industry experts in operational, financial, clinical,
and construction efforts, and began operating TRMC on Jan. 13,
2014 under a short-term management contract. HCCA is projecting
TRMC to break even by the end of calendar year 2014, which Fitch
believes is relatively attainable.

ONGOING CONSTRUCTION DELAYS: The completion of the new bed tower
that was initially scheduled for Oct. 2012 has yet to be
completed. The remaining cost and sources of funding for the
project is unknown at this time but will likely pose a significant
demand on already weak liquidity. TRMC is leveraging HCCA's
expertise to renegotiate contracts and develop a recovery


CLARITY ON CONSTRUCTION PLANS: The Negative Watch reflects the
uncertainty around the timing and funding sources of the
construction project. Management expects to have a construction
completion plan in the next 60 days which is expected to provide
greater clarity on TRMC's ability to meet all its financial


Tulare Local Health Care District, d/b/a Tulare Regional Medical
Center owns and operates a 112-bed hospital in the city of Tulare,
California. Total operating revenue in FYE June 30, 2013 was $76.4
million (exclusive of tax revenues related to GO bonds debt

Sustained Operating Losses from Erosion in Patient Volume

TRMC posted operating losses for the second year in 2013 with an
operating loss of $2.3 million, which includes annual district tax
revenues of approximately $1.5 million that can be used to support
operations and debt service requirements. This is significantly
improved from a loss of $9.9 million in fiscal 2012, from
significant expense reductions in areas such as labor and supply
costs. As a result, operating margin improved to a negative 3.1%
in fiscal 2013 compared to a negative 13% in fiscal 2012.
Similarly, operating EBITDA margin improved to a positive 3.3% in
2013 compared to a negative 7.8% in 2012. As a result of its poor
financial profile, a 'going concern' on the ability to continue
hospital operations was expressed in 2012 and 2013 in the audited
financial statements.

Significant losses continued through the six-month interim period
ended Dec. 31, 2013, with operating and operating EBITDA margins
of negative 12% and negative 3.8%, respectively, compared to a
negative 10% and negative 4.5% in the prior year period. A number
of financial improvement plans are in place, with a goal of
arriving at breakeven performance within this calendar year.

Management Agreement with HealthCare Conglomerate Associates

In December 2013, the board of TRMC selected HCCA as an
affiliation partner. HCCA is a management organization formed with
the purpose of addressing the issues at TRMC, including financial
and operational turnaround, improving physician relationships, and
completing its construction project. Under a 12-month management
contract, HCCA began managing TRMC in Jan. 2014 with the goal of
entering into a long-term lease within this calendar year. As the
potential transaction is in its early stages and no details were
provided, Fitch's analysis assumes the bonds will remain
outstanding in its current form.

Under the management contract, HCCA has several executives on-site
that will manage the day-to-day operations. The turnaround plan
focuses on three key areas -- operational/financial, clinical, and
construction. A chief restructuring officer from HCCA is at TRMC
full-time, assuming the responsibilities of CEO, as well as
several other professionals focusing on physician integration and
construction management.

A thorough review of revenues and expenditures began once HCCA
came onsite in Jan. 2014, and several initiatives are being
executed to improve operating profitability. Projected growth in
revenue is estimated at 5% for this calendar year, with a focus on
recovering patient volumes and improving clinical documentation
and revenue cycle. Targeted expense reductions total 8%, which is
distributed across most expense items including labor, supplies,
and maintenance. Management believes these targets are achievable,
and should bring TRMC back to near breakeven operations in the
next 12 months. Fitch believes financial improvements will largely
be driven by TRMC's ability to recover physician relationships and
patient volume. While somewhat optimistic, Fitch believes these
targets are reasonably attainable over time with a well-executed
strategy, especially given TRMC's historical utilization and

Weak Liquidity

TRMC's liquidity has weakened over the last four audited periods
driven by IT investments, other capital spending, and negative
cash flow. Unrestricted cash and investments totaled $6.3 million
at Dec. 31, 2013, compared to $10.6 million at Dec. 31, 2012 and
$24.4 million at FYE 2010. Days cash on hand of 34 days, cushion
ratio of 2.5x, and cash to debt of 33.2% reflect a sizable decline
from 48.5 days, 4.1x, and 51.2% one year ago, and are very weak
compared to Fitch's median for below investment-grade ratings.
Given ongoing operating expenditures, other infrastructure
investments, and future spending needs related to the construction
project, Fitch believes the ongoing demand on liquidity poses a
serious threat to the solvency of the organization.

According to management, a large part of the year-over-year
decline is due to the timing of IGT receipts. Management indicated
that roughly $3.2 million of matching IGT funds were delayed this
year, negatively impacting liquidity at Dec 31, 2013. The IGT
matching funds were subsequently received, and as of Feb. 26,
2014, management reported unrestricted cash and investments of
$9.8 million.

Fitch also notes a debt service reserve account is in place for
the series 2007 bonds, with approximately $1.3 million held by a

Ongoing Construction Delays

Tulare has a major construction project in progress, which plans
to feature a 24-bed emergency department, a new diagnostic
department, a 16-bed obstetric unit, four surgery suites, and 27
new private patient rooms meeting seismic requirements. This new
expansion tower was initially slated to open Oct. 2012, but
suffered disruptions due to delamination issues. Renegotiating
with contractors and putting a makeup schedule in place is one of
HCCA's priorities, and is expected to be complete in the next two

As of Dec. 31, 2013, there was approximately $6.8 million of
restricted funds remaining for the construction project, which
Fitch believes is insufficient to complete the project. TRMC will
likely need to procure additional funding in addition to existing
funds to complete the project. The Negative Watch reflects the
uncertainties around construction completion and funding, and the
impact on TRMC's solvency. Fitch will evaluate the impact of the
new construction plan and new debt, if any, after plans are
finalized in the next two months.

Weak Debt Metrics Despite Moderate Debt Burden

At Dec. 31, 2013, Tulare's revenue supported debt burden totaled
$19.1 million, consisting of $15.2 million in series 2007 bonds
and $3.9 million in capital leases. The debt is all fixed rate and
produces a maximum annual debt service (MADS) of $2.5 million,
which declines to $1.3 million in fiscal 2017 following the final
payment on the capital lease.

Debt burden is relatively low, as measured by debt to
capitalization of 27.3%. However, due to poor cash flow, MADS
coverage was very low at negative 2.1x in 2012, positive 1.4x in
2013, and negative 0.8x through the six-month interim period,
compared to the average of 4x in 2009-2011. TRMC violated its debt
service covenant in 2012, which resulted in a consultant-call in.
The debt service covenant was met in fiscal 2013, but the ability
to pass in fiscal 2014 is uncertain. Fitch believes TRMC has
sufficient resources to pay its obligations over the next year.

Not included in Fitch's calculation of Tulare's long-term debt are
$85 million in general obligation (GO) bonds, which are not rated
by Fitch. Since Tulare's GO debt is secured by a special
assessment on property taxes in the district, Fitch's calculation
of financial ratios excludes Tulare's GO debt and related


TRMC covenants to disclose annual financial statements within six
months of year-end and quarterly unaudited financial statements
within 30 days through the MSRB EMMA website.


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.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR.  Submissions about insolvency-
related conferences are encouraged.  Send announcements to by e-mail.

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 the nation's bankruptcy courts.  The
list includes links to freely downloadable of these small-dollar
petitions in Acrobat PDF documents.

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  Go 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


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, Ivy B. Magdadaro, Carlo Fernandez,
Christopher G. Patalinghug, and Peter A. Chapman, Editors.

Copyright 2014.  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 or Nina Novak at 202-241-8200.

                  *** End of Transmission ***