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/raid1/www/Hosts/bankrupt/TCR_Public/200212.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, February 12, 2020, Vol. 24, No. 42 Headlines 1103 LUCERNE TERRACE: Taps Latham Luna as Legal Counsel 1230 SOUTH ASSOCIATES: Plan to be Funded by Assets Sale 5019 PARTNERS: Case Summary & 7 Unsecured Creditors 502 S MAGNOLIA: Taps Latham Luna as Legal Counsel AA KODESH: Case Summary & 4 Unsecured Creditors ABA THERAPY: Has Interim Nod to Use Cash Collateral Thru March 31 ABA THERAPY: Obtains Permission to Use Cash Collateral AERKOMM INC: Signs Supply Agreement with Hong Kong Airlines AIM INDUSTRIES: U.S. Trustee Unable to Appoint Committee ALPHATEC HOLDINGS: UBS Group Owns Less Than 5% Stake as of Dec. 31 ALVOGEN PHARMA: S&P Affirms 'B-' ICR; Outlook Negative AMERICAN BLUE RIBBON: U.S. Trustee Forms 3-Member Committee AMERICAN COMMERCIAL: Has Prepack Plan to Cut Debt by $1 Billion AMERICANN INC: Receives $2.1 Million Arbitration Payment from WGP AMISH FARMERS: May Use Celtic Bank Cash Collateral Until March 4 ANTERO RESOURCES: Fitch Cuts LT IDR to BB- & Alters Outlook to Neg. APX GROUP: S&P Rates New $500MM Sr. Secured Notes 'B-' ARABIE TRUCKING: Plan Solicitation Deadline Extended to April 10 ARAMARK SERVICES: Moody's Affirms Ba2 CFR, Outlook Negative ASTRA ACQUISITION: Moody's Gives B3 CFR & Rates First Lien Debt B2 ASTRA ACQUISITION: S&P Assigns 'B-' ICR on Acquisition by Veritas ATHERTON BAPTIST: Fitch Affirms BB+ Rating on 2016 Revenue Bonds BALBOA INTERMEDIATE: S&P Raises ICR to 'B' on Proposed Refinancing BELLEAIR RESERVE: Case Summary & 5 Unsecured Creditors BIOSTAGE INC: James McGorry Quits as Chief Executive Officer BL RESTAURANTS: U.S. Trustee Forms 5-Member Committee BUCKEYE PARTNERS: Fitch Rates New Unsec. Notes Due 2025/2028 'BB' BUCKEYE PARTNERS: Moody's Rates New $1BB Unsecured Notes 'B1' BUCKEYE PARTNERS: S&P Rates New $1BB Senior Unsecured Notes 'BB' CASCADES OF GROVELAND: Hires DeRango Best as Real Estate Appraiser CATHERINE COURTS: Wins Final Court Nod on Use of Cash Collateral CCC INFORMATION: Moody's Affirms B3 CFR, Outlook Stable CCS MEDICAL: Wins 50th Interim Order to Use Cash Collateral CERIDIAN HCM: S&P Upgrades ICR to 'B+' on Improved Credit Measures COCHRAN & PEASE: Unsecureds Owed $1.05M to Split $20K in Plan COMMERCIAL BARGE LINE: S&P Cuts ICR to 'D' on Bankruptcy Filing COMMERCIAL BARGE: Moody's Cuts CFR to Ca & Alters Outlook to Stable COMPREHENSIVE CANCER: Obtains 50th Interim Approval to Use Cash DBMP LLC: Appointment of Asbestos Claimants' Committee Sought DIRECTVIEW HOLDINGS: Appoints Chief Financial Officer DIRECTVIEW HOLDINGS: Signs Consulting Deal with Vine Advisors DO@KING PLOW ARTS: U.S. Trustee Unable to Appoint Committee DORIAN LPG: SEACOR Holdings Reports 0% Equity Stake DPW HOLDINGS: Enters Into Exchange Agreement for $7.7M Debt ENCINO ACQUISITION: Fitch Affirms B+ LT IDR & Alters Outlook to Neg ENGINE HOLDING: S&P Downgrades ICR to 'CCC-'; Outlook Negative EXACTUS INC: Will Issue 1.9 Million Common Shares as Compensation FEMUR BUYER: S&P Downgrades ICR to B-; Outlook Stable FGL HOLDINGS: Moody's Reviews Ba3 Issuer Rating for Upgrade FGL HOLDINGS: S&P Puts 'BB+' Long-Term ICR on Watch Positive FLUSHING AIRPORT: Case Summary & 2 Unsecured Creditors FRED’S INC: Unsecureds' Recovery in Liquidation To Be Determined FTS INTERNATIONAL: Receives Noncompliance Notice from NYSE GENCANNA GLOBAL: Files for Chapter 11, Obtains $10M DIP Financing GNC HOLDINGS: FMR LLC Reports Ownership of 9.1% Class A Shares GOMEZ GLOBAL: Feb. 26 Plan & Disclosures Hearing Set GROWLIFE INC: Closes $500K Securities Purchase Agreement with CVP H & B HOLDINGS: Court Grants 90-Day Access to Cash Collateral HAGAMAN PROPERTY: Case Summary & 20 Largest Unsecured Creditors HARSCO CORP: Fitch Affirms 'BB' IDR & Alters Outlook to Negative HECLA MINING: Moody's Rates Proposed $475MM Sr. Unsec. Notes Caa1 HECLA MINING: S&P Assigns Prelim 'B' Rating to $475MM Senior Notes IBIO INC: Postpones Annual Meeting to March 5 INSPIRED CONCEPTS: Court Grants Cash Access Thru Feb. 14 INSPIRED CONCEPTS: Seeks to Use Fifth Third, Mercantile Banks’ Cash K & M SPRAYING: Has Permission to Use Cash Collateral Until Feb. 14 KAIROS HOMES: Permitted to Sell Certain Properties to Pay UST KJM CAPITAL: Taps Robert Frezza of Ankura Consulting as CRO KRS GLOBAL: Gets Interim Court Nod to Use Cash Collateral KRS GLOBAL: Seeks Free and Unencumbered Use of Cash Collateral LUXURY LIMOUSINE: Plan Hearing Resumes Today MILLMAC CORPORATION: Has Until April 16 to File Plan & Disclosures MONTICELLO PIZZA: Gets Cash Access on Final Basis Thru June 30 NATIONAL QUARRY: Bankr. Administrator Unable to Appoint Committee NICK'S PIZZA: Seeks Authority to Use Cash Collateral NICK'S PIZZA: Stipulates with On Deck Capital on Collateral Use O'LINN SECURITY: May Use Cash Collateral Thru June 30 PERSPECTA INC: Fitch Lowers LongTerm IDR to 'BB', Outlook Stable PHM NETHERLANDS: S&P Alters Outlook to Neg., Affirms 'B' ICR PIONEER HOLDING: Moody's Withdraws B3 CFR on Sec. Notes Repayment PIXELLE SPECIALTY: Moody's Raises CFR to B1, Outlook Stable PROMENADE ON FIFTH: U.S. Trustee Unable to Appoint Committee PUERTO RICO: GO and PBA Bondholders Accept 30% Haircuts REAVANS ANNEX: Judge Denies Access to Thrive Cash Collateral REGIONAL SITE: Court Enters Third Interim Order to Use Cash REVA MEDICAL: U.S. Trustee Bars Cash Order Release Provision REVA MEDICAL: Wins Cash Collateral Access Thru Feb. 29 RHC LLC: U.S. Trustee Unable to Appoint Committee S C BHAIRA INC: Wins Final OK on Cash Collateral Motion SCIENCE APPLICATIONS: S&P Alters Outlook to Neg., Affirms BB+ ICR SCIENTIFIC GAMES: BlackRock Owns 6.8% of CL-A Shares as of Dec. 31 SKY-SKAN INC: Cash Collateral Use Continued Through April 10 SOBEYS INC: S&P Affirms BB+ Issuer Credit Rating; Outlook Positive SOUTHERN INYO: Says Fourth Amended Plan Consensual SOUTHWESTERN ENERGY: Fitch Alters Outlook on BB LT IDR to Negative ST ANNE RETIREMENT: Fitch Rates $35MM Revenue Bonds 'BB+' STOREWORKS TECHNOLOGIES: ScanSource Appointed as Committee Member SUGARFINA INC: Debtors Have Until May 5 to File Plan & Disclosures SUNCREST STONE: Again Amends Reorganization Plan TENNECO INC: Moody's Affirms B1 CFR & Alters Outlook to Negative TEPA PROPERTIES: Court Denies Cash Collateral Motion as Moot TRICO GROUP: Moody's Alters Outlook on B3 CFR to Positive TWO GUNS CONSULTING: Case Summary & 20 Largest Unsecured Creditors UNIT CORP: FMR LLC Has 12.5% Stake as of Dec. 31 UNITED RENTALS: Moody's Rates $750MM Unsec. Notes Due 2030 'Ba3' UNITED RENTALS: S&P Rates $750MM Unsecured Notes 'BB-' UNIVERSAL HEALTH: 2019 Case Dismissed VALERITAS HOLDINGS: Zealand Offers $23M Cash, to Keep Employees VALVOLINE INC: Moody's Assigns Ba3 Rating on New Unsec. Notes VALVOLINE INC: S&P Rates New $500MM Unsecured Notes 'BB' VEA INVESTMENTS: March 24 Plan & Disclosures Hearing Set VIZITECH USA: Gets Interim Court Nod on Cash Use Thrul April 20 WOODFORD EXPRESS: S&P Lowers Senior Secured Debt Rating to 'B' YAK ACCESS: Moody's Affirms B2 CFR, Outlook Stable ZVAH INC: A to Z Construction to Have $356K Unsecured Claim ********* 1103 LUCERNE TERRACE: Taps Latham Luna as Legal Counsel ------------------------------------------------------- 1103 Lucerne Terrace LLC received approval from the U.S. Bankruptcy Court for the Middle District of Florida to hire Latham Luna Eden & Beaudine, LLP as its legal counsel. Latham Luna will provide these services in connection with the Debtor's Chapter 11 case: a. advise the Debtor of its rights and duties in the bankruptcy case; b. prepare pleadings related to the bankruptcy case, including a disclosure statement and a plan of reorganization; c. take other necessary actions incident to the proper preservation and administration of the Debtor's bankruptcy estate. Latham Luna will be paid at these hourly rates: Attorneys $550 Paraprofessionals $160 The attorneys who are expected to provide the services are: Daniel Velasquez $300 per hour Justin Luna $425 per hour Frank M. Wolff $550 per hour Latham Luna was paid a fee of $10,000 for post-petition services and expenses to be incurred in connection with the case. Justin Luna, Esq., a partner at Latham Luna, assured the court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Latham Luna can be reached at: Justin M. Luna, Esq. Latham Luna Eden & Beaudine, LLP 111 N. Magnolia Avenue, Suite 1400 Orlando, FL 32801 Tel: (407) 481-5800 Fax: (407) 481-5801 Email: jluna@lathlamluna.com About 1103 Lucerne Terrace LLC 1103 Lucerne Terrace LLC, a commercial real estate investment company based in Orlando, Fla., filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-08235) on Dec. 18, 2019, listing under $1 million in both assets and liabilities. Judge Karen S. Jennemann oversees the case. Justin M. Luna, Esq., at Latham Luna Eden & Beaudine, LLP, is the Debtor's legal counsel. 1230 SOUTH ASSOCIATES: Plan to be Funded by Assets Sale ------------------------------------------------------- Debtor 1230 South Associates, LLC, filed with the U.S. Bankruptcy Court for the Southern District of West Virginia a Combined Disclosure Statement and Plan of Reorganization. 1230 South Associates is the owner of a manufacturing facility located at Davisville, Wood County, West Virginia. The site consists of approximately 4.7 acres and more than 30,000square feet of industrial and manufacturing space. The property had been used for welding and fabrication work done for local chemical companies. The business has operated for more than 30 years. Mike Romine, the owner, has made the decision to sell all assets and to devote the net sale proceeds to the claim of United Bank. At the time of the filing of this case, United Bank had not started a foreclosure proceeding, but it was anticipated that the Bank would soon begin to exercise its remedies. The Debtor has engaged the services of Realcorp to go about marketing the property. Realcorp has reached out to potential purchasers in the Ohio Valley area. Potential purchasers include companies in the oil and gas business; pipeline companies; and other fabrication shops which engage in large scale welding projects. The Plan proposes to treat claims and interests as follows: * Class S - United Bank is secured by the business real property and also by equipment and machinery as itemized in the schedules. Further, United Bank is secured by a lien on an insurance policy on Michael Romine individually and is further protected by the personal guaranty of Michael Romine, individually. Michael Romine, individually, has sufficient net worth to totally satisfy any deficiency which may arise from the disposition of the collateral owned by the Debtor. * Class U - Class U will represent any unsecured component of the claim of United Bank in the event that the collateral sells for less than the Bank's full claim. The Bank also holds a lien on certain insurance proceeds owned by Michael Romine, individually, and has a personal guaranty of Michael Romine, individually. In the event that an unsecured deficiency exists, the parties will negotiate about how to pay that unsecured claim. * Class P - Class P is the claim of the Sheriff-Treasurer of Wood County, West Virginia, which shall be paid in full under the terms of the Plan. * Class O - represents the ownership interest of Michael Romine. Mr. Romine will not retain any interest unless all creditors have been paid in full. A full-text copy of the combined disclosure and plan dated Jan. 21, 2020, is available at https://tinyurl.com/u9ckcyq from PacerMonitor.com at no charge. The Debtor is represented by: Joseph W. Caldwell, Esquire CALDWELL & RIFFEE P.O. Box 4427 Charleston, WV 25364 Tel: (304) 925-2100 Fax: (304) 925-2193 E-mail: joecaldwell@frontier.com About 1230 South Associates 1230 South Associates, LLC, a privately held company in Parkersburg, W.Va., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. W.Va. Case No. 19-60158) on Nov. 6, 2019. At the time of the filing, the Debtor had estimated assets of between $500,000 and $1 million and liabilities of between $1 million and $10 million. The case is assigned to Judge Frank W. Volk Usdj. Joseph W. Caldwell, Esq., at Caldwell & Riffee, is the Debtor's legal counsel. 5019 PARTNERS: Case Summary & 7 Unsecured Creditors --------------------------------------------------- Debtor: 5019 Partners, LLC 5019 Genesta Ave. Encino, CA 91316 Business Description: 5019 Partners, LLC is a privately held company engaged in activities related to real estate. 5019 Partners owns a single family residential rental property in Encino, CA, having a current value of $700,000, based on actual condition of the property. The Company previously sought bankruptcy protection on May 22, 2008 (Bankr. C.D. Calif. Case No. 08-13370). Chapter 11 Petition Date: February 11, 2020 Court: United States Bankruptcy Court Central District of California Case No.: 20-10320 Judge: Hon. Martin R. Barash Debtor's Counsel: Dana M. Douglas, Esq. ATTORNEY AT LAW 11024 Balboa Blvd., No. 431 Granda Hills, CA 91344 Tel: 818-360-8295 E-mail: dana@danamdouglaslaw.com Total Assets: $700,900 Total Liabilities: $1,035,236 The petition was signed by Tyler Murphy, managing member. A copy of the petition containing, among other items, a list of the Debtor's seven unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/8GusrV 502 S MAGNOLIA: Taps Latham Luna as Legal Counsel ------------------------------------------------- 502 S Magnolia Ave LLC received approval from the U.S. Bankruptcy Court for the Middle District of Florida to hire Latham Luna Eden & Beaudine, LLP as its legal counsel. Latham Luna will provide these services in connection with the Debtor's Chapter 11 case: a. advise the Debtor of its rights and duties in the bankruptcy case; b. prepare pleadings related to the bankruptcy case, including a disclosure statement and a plan of reorganization; c. take other necessary actions incident to the proper preservation and administration of the Debtor's bankruptcy estate. Latham Luna will be paid at these hourly rates: Attorneys $550 Paraprofessionals $160 The attorneys who are expected to provide the services are: Daniel Velasquez $300 per hour Justin Luna $425 per hour Frank M. Wolff $550 per hour Latham Luna was paid a fee of $10,000 for post-petition services and expenses to be incurred in connection with the case. Justin Luna, Esq., a partner at Latham Luna, assured the court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Latham Luna can be reached at: Justin M. Luna, Esq. Latham Luna Eden & Beaudine, LLP 111 N. Magnolia Avenue, Suite 1400 Orlando, FL 32801 Tel: (407) 481-5800 Fax: (407) 481-5801 Email: jluna@lathlamluna.com About 502 S Magnolia Ave LLC 502 S Magnolia Ave LLC, a commercial real estate investment company, based in Orlando, Fla., filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-11861) on Dec. 18, 2019, listing under $1 million in both assets and liabilities. Judge Catherine Peek Mcewen oversees the case. Justin M. Luna, Esq., at Latham Luna Eden & Beaudine, LLP, is the Debtor's legal counsel. AA KODESH: Case Summary & 4 Unsecured Creditors ----------------------------------------------- Debtor: AA Kodesh Holdings, LLC 1451 47th Street Brooklyn, NY 11219 Business Description: AA Kodesh Holdings, LLC is primarily engaged in renting and leasing real estate properties. Its principal assets are located at 915 Sterling Place, Brooklyn, NY 11216. The Debtor previously sought bankruptcy protection on Jan. 21, 2019 (Bankr. E.D.N.Y. Case No. 19-40359). Chapter 11 Petition Date: February 11, 2020 Court: United States Bankruptcy Court Eastern District of New York Case No.: 20-40860 Judge: Hon. Carla E. Craig Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Paul P. Mihalitsianos, managing member. A copy of the petition containing, among other items, a list of the Debtor's four unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/j9blMv ABA THERAPY: Has Interim Nod to Use Cash Collateral Thru March 31 ----------------------------------------------------------------- Judge Mindy A. Mora, pursuant to a second interim order, authorized ABA Therapy Solutions, LLC to access cash collateral until the date of the continued hearing on the motion set for March 31, 2020 at 1:30 p.m. As adequate protection, Queen Funding LLC and WG Fund, LLC are granted nunc pro tunc to the Petition Date, a replacement lien pursuant to Section 361(2) of the Bankruptcy Code on the type of collateral described in their respective security agreements. The Debtor is a party, with Queen Funding LLC with respect to a Secured Merchant Agreement dated October 10, 2019, and with WG Funding, LLC under a Secured Merchant Agreement dated November 19, 2019, each agreement secured by interests in the Debtor's future receivables. A copy of the second interim order is available at https://is.gd/Xddmw0 from PacerMonitor.com at no charge. About ABA Therapy Solutions Founded in 2012 by Linda Peirce, ABA Therapy Solutions provides in-home and clinic services covering language, behavioral, self-help skills and social skills for individuals with autism spectrum disorders, down syndrome and other developmental disabilities. ABA Therapy Solutions filed a voluntary Chapter 11 petition (Bankr. S.D. Fla. Lead Case No. 20-10208) on Jan. 7, 2020. In the petition signed by Linda Peirce, managing member, the Debtor disclosed $157,637 in assets and $1,342,155 in liabilities. Judge Erik P. Kimball oversees the case. Craig I. Kelley, Esq., at Kelley Fulton & Kaplan, P.L., is the Debtor's legal counsel. ABA THERAPY: Obtains Permission to Use Cash Collateral ------------------------------------------------------ ABA Therapy Solutions, LLC sought and obtained permission from the U.S. Bankruptcy Court for the Southern District of Florida to use cash collateral of certain parties-in-interest to pay the Debtor's regular operating expenses in the regular course of business, as well as the administrative expenses in these Chapter 11 proceedings as they become due. In the motion, the Debtor disclosed that creditors who may have an interest in the cash collateral include (i) Queen Funding LLC, (ii) OnDeck Capital, (iii) Libertas, (iv) Forward Financing, LLC, (v) WG Fund, LLC, (vi) NY Tribeca Group, LLC, (vii) Everest Business Funding, (viiii) Ibex Funding Group LLC, (ix) Thryve Capital Funding, LLC, (x) Capflow, Inc., (xi) TD Bank, N.A., (xii) Kabbage, and (xiii) Complete Business Solution Group. Judge Mindy Mora authorized the Debtor's use of cash collateral on an interim basis nunc pro tunc to the Petition Date until January 28, 2020. Pursuant to the order, Queen Funding LLC and WG Fund, LLC are granted, nunc pro tunc to the Petition Date and to the extent of the Debtor's use of cash collateral during the interim period, a replacement lien pursuant to Section 361(2) of the Bankruptcy Code on the type of collateral described in their respective security agreements, to the same extent as any pre-petition lien. A copy of the interim order is available for free at https://is.gd/1fl268 from PacerMonitor.com. About ABA Therapy Solutions Founded in 2012 by Linda Peirce, ABA Therapy Solutions provides in-home and clinic services covering language, behavioral, self-help skills and social skills for individuals with autism spectrum disorders, down syndrome and other developmental disabilities. ABA Therapy Solutions filed a voluntary Chapter 11 petition (Bankr. S.D. Fla. Lead Case No. 20-10208) on Jan. 7, 2020. In the petition signed by Linda Peirce, managing member, the Debtor disclosed $157,637 in assets and $1,342,155 in liabilities. Judge Erik P. Kimball oversees the case. Craig I. Kelley, Esq., at Kelley Fulton & Kaplan, P.L., is the Debtor's legal counsel. AERKOMM INC: Signs Supply Agreement with Hong Kong Airlines ----------------------------------------------------------- Aerkomm Inc.'s wholly owned subsidiary, Aircom Pacific, Inc. has signed an agreement with Hong Kong Airlines Ltd to provide Hong Kong Airlines with both its AirCinema and AERKOMM K++ In-Flight Entertainment and Connectivity ("IFEC") solutions. Under the terms of the agreement, Aircom shall provide to Hong Kong Airlines its Ka-band AERKOMM K++ IFEC system for installation on its fleet of 12 Airbus A320 and 5 Airbus A330-300 aircraft as well as the AERKOMM AirCinema system for the Airbus A320 aircraft. The AERKOMM AirCinema system, which Aircom is designing and implementing specifically for Hong Kong Airlines, will introduce free high speed internet access to the seat back screens of Hong Kong Airlines' Airbus A320 aircraft, connected via the Ka-band AERKOMM K++ IFEC system. Instead of the traditionally preloaded and fixed selection of in-flight entertainment, passengers will have access to high-speed internet steaming services for videos, music, live TV and social media. Aircom and Hong Kong Airlines will work closely together to develop the AERKOMM AirCinema system, thus making Hong Kong Airlnes the launch customer for this innovative solution. The AERKOMM K++ IFEC system will also provide passengers of Hong Kong Airlines with an "at home" network experience by giving free access to on-board WiFi internet connectivity to all passenger personal devices, including laptops, mobile phones and tablets. The AERKOMM K++ system will be ready future-proof and compatible with the next generation of satellite technologies. This system will also provide passengers of Hong Kong Airlines with access to e-commerce amenities such as In-Flight shopping and travel services. Details and terms about the services to be provided via the AERKOMM K++ system are being actively discussed by Aircom and Hong Kong Airlines and will be set forth in one or more service level agreements to be entered into by the parties. Mr. Jeffrey Wun, CEO of Aerkomm, commented, "This agreement marks the next step in our partnership with Hong Kong Airlines, who will be the launch customer of our AERKOMM K++ IFEC sytem. In addition, this agreement, as the first application of our technology to a commercial passenger fleet, is a milestone in the commercialization of our AERKOMM K++ IFEC system. We look forward to furthering our partnership with Hong Kong Airlines to implement our industry-leading technology." About Aerkomm Headquartered in Nevada, USA, Aerkomm Inc. -- http://www.aerkomm.com/-- is a full-service development stage provider of in-flight entertainment & connectivity (IFEC) solutions, intended to provide airline passengers with a broadband in-flight experience that encompasses a wide range of service options. Those options include Wi-Fi, cellular, movies, gaming, live TV, and music. The Company plans to offer these core services, which it is currently still developing, through both built-in in-flight entertainment systems, such as a seat-back display, as well as on passengers' own personal devices. Chen & Fan Accountancy Corporation, in San Jose, California, the Company's auditor since 2017, issued a "going concern" qualification in its report dated March 22, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing that the Company has suffered recurring loss from operations that raises substantial doubt about its ability to continue as a going concern. As of Sept. 30, 2019, the Company had $51.28 million in total assets, $3.92 million in total liabilities, and $47.35 million in total stockholders' equity. AIM INDUSTRIES: U.S. Trustee Unable to Appoint Committee -------------------------------------------------------- The U.S. Trustee, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of AIM Industries, LLC, according to court dockets. About AIM Industries Based in Riverview, Fla., AIM Industries, LLC filed for Chapter 11 protection (Bankr. M.D. Fla. Case No. 20-00031) on Jan. 3, 2020, listing under $1 million in both assets and liabilities. Judge Caryl E. Delano oversees the case. Buddy D. Ford, P.A. is the Debtor's legal counsel. ALPHATEC HOLDINGS: UBS Group Owns Less Than 5% Stake as of Dec. 31 ------------------------------------------------------------------ In an amended Schedule 13G filed with the Securities and Exchange Commission, UBS Group AG directly and on behalf of certain subsidiaries disclosed that as of Dec. 31, 2019, it beneficially owns less than 5% of the outstanding shares of common stock of Alphatec Holdings, Inc. A full-text copy of the regulatory filing is available for free at the SEC's website at: https://is.gd/Dhtxhw About Alphatec Holdings Carlsbad, California-based Alphatec Holdings, Inc., through its wholly-owned subsidiaries, Alphatec Spine, Inc. and SafeOp Surgical, Inc., is a provider of innovative spine surgery solutions dedicated to revolutionizing the approach to spine surgery. ATEC designs, develops and markets spinal fusion technology products and solutions for the treatment of spinal disorders associated with disease and degeneration, congenital deformities and trauma. The Company markets its products in the U.S. via independent sales agents and a direct sales force. Alphatec reported a net loss attributable to common shareholders of $42.46 million for the year ended Dec. 31, 2018, compared to a net loss attributable to common shareholders of $2.29 million for the year ended Dec. 31, 2017. For the nine months ended Sept. 30, 2019, the Company reported a net loss of $39.97 million. As of Sept. 30, 2019, Alphatec had $178.28 million in total assets, $31.58 million in total current liabilities, $51.09 million in long-term debt (less current portion), $1.26 million in operating lease liability, $13.08 million in other long-term liabilities, $23.60 million in redeemable preferred stock, and $57.65 million in total stockholders' equity. Alphatec said in its Quarterly Report for the period ended Sept. 30, 2019 that, "The Company has incurred significant net losses since inception and has relied on its ability to fund its operations through revenues from the sale of its products, equity financings and debt financings. As the Company has historically incurred losses, successful transition to profitability is dependent upon achieving a level of revenues adequate to support the Company's cost structure. Operating losses and negative cash flows are expected to continue for at least the next year as the Company continues to incur costs related to the execution of its operating plan and introduction of new products. In the future, the Company may need to seek additional funds from public and private equity or debt financings or other sources to fund its projected operating requirements. However, there is no guarantee that the Company will be able to obtain further financing, or do so on reasonable terms. If the Company is unable to raise additional funds on a timely basis, or at all, it would be materially adversely affected." ALVOGEN PHARMA: S&P Affirms 'B-' ICR; Outlook Negative ------------------------------------------------------ S&P Global Ratings affirmed its 'B-' issuer credit rating on Pine Brook, N.J.-based generic pharmaceutical company Alvogen Pharma US Inc. and its 'B-' issue-level rating. The rating affirmation follows the company's announcement of the amendment to its senior secured term loan B, which will push the maturity out by more than a year and provide the issuer with an 18-month amortization holiday. Concurrently, the maturity on its asset—backed loan (ABL) will also be extended by two years. While the amendment improves Alvogen's capital structure, S&P believes near-term operational issues remain. The recovery rating on the company's remaining senior secured stub debt that will not be amended remains '4'. Meanwhile, S&P assigned its 'B-' issue-level rating and '4' recovery rating to Alvogen's amended term loan B due December 2023. The '4' recovery rating reflects S&P's expectation for average recovery (30%-50%; rounded estimate: 40%) in the event of payment default. The affirmation reflects S&P's expectation that operating performance will improve substantially in 2020 following recent product launches. Operating performance in 2019 was severely impaired by product launch delays and Alvogen's voluntary exit from the commercial Oseltamivir market during its bidding process for the CDC contract. As a result, adjusted leverage increased drastically to 23x for the 12-month-period ended Sept. 30, 2019, with free cash outflows of over $200 million. With contributions from recent and near-term product launches, the awarded government contract for Oseltamivir, and the expected addition of Gralise, S&P expects leverage to reduce to around 5.1x and discretionary cash flow to improve to around $50 million for fiscal year-end 2020. The negative outlook on Alvogen U.S. Pharma reflects S&P's expectation for elevated leverage above 10x in 2019 and above 5x in 2020 and generic pricing pressure and cash flow deficits over the next 12 months. The rating agency believes these issues may not reverse if recent and near-term product launches do not perform as expected. "We could consider a downgrade if Alvogen's new product launches do not proceed as planned, resulting in reduced revenue growth and cash flow which does not comfortably cover fixed charges (including amortization payments). This would require substantial contributions from the parent and could lead us to view the capital structure as unsustainable. We could also lower the rating, if the company does not carry out the amendment and we believe sources of liquidity will not cover uses of liquidity over the next 12 months," S&P said. "We could revise the outlook to stable if Alvogen's new-product sales expand as planned, resulting in leverage close to 6.0x and positive free cash flow generation through the end of 2020. Under this scenario, we would need to continue to expect cash flow at parent Alvogen Lux to remain positive," the rating agency said. AMERICAN BLUE RIBBON: U.S. Trustee Forms 3-Member Committee ----------------------------------------------------------- The U.S. Trustee for Regions 3 and 9 appointed three creditors to serve on the official committee of unsecured creditors in the Chapter 11 cases of American Blue Ribbon Holdings, LLC and its affiliates. The committee members are: (1) SCF RC Funding I, LLC Attn: AJ Peil 902 Carnegie Center, Suite 520 Princeton, NJ 08540 Phone: (609) 436-0619 (2) Realty Income Corp. Attn: Kirk Carson 11995 El Camino Real San Diego, CA 92130 Phone: (858) 284-5256 (3) Valassis Direct Mail, Inc. Attn: Vanessa O'Connell 15955 La Cantera Parkway San Antonio, TX 78256 Phone: (210) 694-1933 Fax: (210) 697-1326 Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About American Blue Ribbon Based in Nashville, Tenn., American Blue Ribbon Holdings, LLC -- http://www.americanblueribbonholdings.com/-- operates two distinct regional family dining restaurant brands -- Village Inn and Bakers Square, as well as a bakery operation, Legendary Baking. Founded in 1958 and 1969, respectively, Village Inn and Bakers Square are full-service sit-down family dining restaurant concepts that feature a variety of menu items for all meal periods. As of the petition date, in connection with the family dining business, the Debtors operate 97 restaurants in 13 states, franchise 84 Village Inn restaurants, and maintain an e-commerce presence as well. Legendary Baking is the Debtors' manufacturing operation that produces pies in two Debtor-owned production facilities. Legendary Baking provides those pies to the Family Dining Business for sale in Village Inn and Bakers Square restaurants while also selling pies to other restaurants, independent bakers and customers. American Blue Ribbon Holdings and four affiliates, Legendary Baking LLC, Legendary Baking Holdings LLC, Legendary Baking of California LLC, and SVCC, LLC, filed Chapter 11 petitions (Bankr. D.Del. Lead Case No. 20-10161) on Jan. 27, 2020. As of the petition date, American Blue Ribbon Holdings estimated between $100 million and $500 million in assets and between $50 million and $100 million in liabilities. The petitions were signed by Kurt Schnaubelt, chief financial officer. Judge Laurie Selber Silverstein oversees the cases. Young Conaway Stargatt & Taylor, LLP and KTBS LAW LLP represent the Debtors as counsel. Epiq Corporate Restructuring, LLC is the Debtors' claims and noticing agent. AMERICAN COMMERCIAL: Has Prepack Plan to Cut Debt by $1 Billion --------------------------------------------------------------- American Commercial Lines Inc. has reached a Restructuring Support Agreement with its lenders on a pre-packaged plan to recapitalize the business, significantly reduce the Company's debt and materially increase its liquidity. Under the terms of the plan, ACL will receive $200 million in new capital to support liquidity and investments in the business. In addition, the agreement provides for a reduction of funded debt by approximately $1 billion. To implement the pre-packaged plan, as contemplated by the RSA, ACL voluntarily filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division on February 7, 2020. ACL's operations are continuing as normal. Upon emergence, ACL will continue to provide customers with competitive and reliable barge transportation services. Mark Knoy, President and Chief Executive Officer of American Commercial Lines, said, "[W]e are moving forward with our pre-packaged plan to recapitalize the business, significantly reduce the Company's debt and materially increase our liquidity, which we believe will allow us to focus more of our resources on competing in the marketplace and investing in the business to support future growth. Because we already have the support of a substantial majority of our term loan lenders, we expect to move through this process very quickly." Mr. Knoy continued, "In recent days we have reached out to many of our customers, vendors and other partners, and we appreciate the many expressions of support and confidence they have conveyed to us.I also want to thank our dedicated teammates for their continued hard work and focus on working safely. We look forward to continuing to provide the safest, most cost-effective and environmentally friendly barge transportation solutions." As announced on February 4, 2020, the Company has entered into a RSA with holders of a substantial majority of its term loan lenders on a "pre-packaged" plan to recapitalize the business, significantly reduce the Company's debt and substantially increase the Company's liquidity. Under the terms of the RSA, ACL will receive $200 million in new equity capital to support liquidity and investments in the business. In addition, the RSA provides for a reduction of funded debt by approximately $1 billion. ACL has received a commitment for debtor-in-possession ("DIP") financing consisting of a $640 million asset based loan ("ABL") and a $50 million term loan from certain of its existing lenders. Upon Court approval, the new financing and cash generated from the Company's ongoing operations will be used to pay off ACL's existing ABL and to support the business during the court-supervised process. The Company has filed a number of customary motions seeking court authorization to continue to support its operations during the expedited court-supervised process, and employee wages and benefits will continue to be paid in the ordinary course. The Company intends to seek to pay suppliers in full under normal terms for all goods and services. Under terms of the pre-packaged plan, which is subject to Court approval, general unsecured pre-petition claims will be paid in full in the ordinary course. $1.48 Billion of Funded Debt As of the Petition Date, the Debtors' funded debt obligations consist of: (i) $536 million in principal amount outstanding under a first lien asset based revolving credit facility; and (ii) $949 million in principal amount outstanding under a second lien term loan facility. As of the Petition Date, the aggregate principal amount of outstanding funded debt obligations under the two primary debt facilities is approximately $1.48 billion. Key Terms of Restructuring The principal terms of the restructuring, which are set forth in greater detail in the RSA and the Plan, are: * On the Effective Date, the Allowed Claims under the DIP ABL Facility and the ABL Facility will be repaid in full in Cash, unless each holder of such claims agrees to an alternative treatment, which may include participation in the New ABL Facility; * On the Effective Date, all of the Allowed Term Loan Claims will be fully equitized into 100% of the Take Back Preferred Equity and 95% of the New Common Equity (or, in each case, New Warrants therefor); * On the Effective Date, certain holders of Allowed Term Loan Claims will contribute $200 million of new money in exchange for a like-amount of mandatorily convertible New Money Preferred Equity in Reorganized ACL, junior in priority to the Take Back Preferred Equity and senior in priority to the New Common Equity (or, in each case, New Warrants therefor), of which (x) $150 million will be contributed pursuant to the Rights Offering which will be backstopped by the Backstop Commitment Parties, and (y) $50 million will be deemed contributed in exchange for the Term Loan DIP Facility Claims; * Substantially all other Claims against ACL, including all General Unsecured Claims, will either be paid in full in cash in the ordinary course after the Effective Date or otherwise be Unimpaired; and * Holders of the equity interests in Finn Holding will receive their pro rata share of the Sponsor Warrants. About American Commercial Lines American Commercial Lines Inc. -- https://www.bargeacbl.com/ -- is a provider of liquid and dry cargo barge transportation services in the United States, operating a modern fleet of approximately 3,500 barges on the Mississippi River, its tributaries, and on the Gulf Intracoastal Waterway. In addition, ACL operates a series of strategically-placed harbor services facilities throughout the region, providing fleeting, shifting, cleaning, and repair services to their fleet of barges and 188 towboats, as well as to third-parties. With approximately 2,100 employees as of the Petition Date, and customers that include many of the country's major energy, petrochemical, industrial, and agricultural companies. ACL was founded in 1915 and is headquartered in Jeffersonville, Indiana. On Feb. 7, 2020, American Commercial Lines Inc. and 10 affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-30982) to seek confirmation of a prepackaged plan that will cut debt by $1 billion. The Hon. Marvin Isgur is the case judge. Milbank LLP is serving as the Company's legal counsel, Greenhill & Co. is serving as its financial advisor and Alvarez & Marsal North America, LLC, is serving as restructuring advisor. Porter Hedges LLP is the local counsel. The Company's claims agent is Prime Clerk LLC. AMERICANN INC: Receives $2.1 Million Arbitration Payment from WGP ----------------------------------------------------------------- Americann, Inc., on Feb. 5, 2020, received $2,068,259 cash from Wellness Group Pharms, LLC in satisfaction of an arbitration award in AmeriCann's favor. Beginning Sept. 21, 2014, the Company entered into a series of agreements with WGP, an entity that was pursuing licenses to operate marijuana cultivation facilities under the Illinois Compassionate Use of Medical Cannabis Pilot Program Act. On Feb. 2, 2015 WGP was granted a license to operate a cultivation facility. As amended, these agreements provided, among other things, that the Company was to provide working capital advances to WGP, with any advances accruing interest at a rate of 18% per annum. Between February 2015 and April 2015, the Company made working capital advances to WGP totaling $673,294. The Company also funded costs totaling $332,357 to begin construction of WGP's cultivation facility. Due to WGP's failure to comply with the terms of these agreements, and repeated lack of good faith and fair dealing, the Company terminated the agreements with WGP. On April 7, 2017 the Company filed an arbitration claim against WGP. The arbitration hearing commenced on Jan. 8, 2018 and concluded on Jan. 10, 2018. On March 15, 2018, the arbitration panel issued its final award and awarded the Company $1,761,675. This award consisted of $1,045,000, plus interest at the rate of 18% per year from April 18, 2015 through March 15, 2018 ($550,000), its attorneys' fees and costs ($113,865), and arbitration fees and expenses ($52,810). About Americann Headquartered in Denver, Colorado, AmeriCann is a specialized cannabis company that is developing cultivation, processing and manufacturing facilities. AmeriCann uses greenhouse technology which is superior to the current industry standard of growing cannabis in warehouse facilities under artificial lights. AmeriCann is designing GMP Certified cannabis extraction and product manufacturing infrastructure. Through a wholly-owned subsidiary, AmeriCann Brands, Inc., the Company intends to secure licenses to produce cannabis infused products including beverages, edibles, topicals, vape cartridges and concentrates. AmeriCann Brands, Inc. plans to operate a Marijuana Product Manufacturing business at MMCC with over 40,000 square feet of state-of-the art extraction and product manufacturing infrastructure. Americann reported a net loss of $4.90 million for the year ended Sept. 30, 2019, compared to a net loss of $4.43 million for the year ended Sept. 30, 2018. As of Sept. 30, 2019, the Company had $11.77 million in total assets, $5.65 million in total liabilities, and $6.11 million in total stockholders' equity. MaloneBailey, LLP, in Houston, Texas, the Company's auditor since 2016, issued a "going concern" qualification in its report dated Jan. 14, 2020, citing that the Company has suffered recurring losses from operations and has an accumulated deficit that raises substantial doubt about its ability to continue as a going concern. AMISH FARMERS: May Use Celtic Bank Cash Collateral Until March 4 ---------------------------------------------------------------- Judge Timothy A. Barnes of the U.S. Bankruptcy Court for the Northern District of Illinois authorized Amish Farmers, Inc. to use the cash collateral of Celtic Bank through March 4, 2020 on an interim basis. Status is set for March 3, 2020 at 10:30 a.m. The Debtor may use cash collateral for items set forth in the budget, to pay ordinary and reasonable business expenses to operate its business. However, no expenditure of the Debtor will exceed 10% of the budgeted disbursements without the consent of Celtic Bank. Celtic Bank will receive a security interest in and replacement liens upon all of the Debtor's now existing or hereafter acquired property, in existence before or after the Petition Date, including without limitation, deposit accounts, accounts receivable, inventory, machinery and equipment, and the proceeds and products thereof, to the extent actually used and for any diminution in value of Celtic Bank's Collateral securing all indebtedness of the Debtor to Celtic Bank which replacement lien will be the same lien as existed as the prepetition valid liens of records. Such lien and security interest granted to Celtic Bank will have the same validity, perfection and enforceability as the prepetition liens held by Celtic Bank without executing or recording any financing statements, security agreements or other documents. The Debtor will make adequate protection payments to Celtic Bank in the amount of $1,800 beginning Feb. 4, 2020, and continuing on the 2nd day of each month thereafter until further order of the Court. In addition to and as a supplement to the foregoing protections, the Debtor will maintain insurance covering the full value of all collateral, and will permit onsite inspection of such collateral, policies of insurance and financial statements, including, but not limited to, monthly operating reports. A copy of the Order is available at PacerMonitor.com at https://is.gd/jMk9Sc at no charge. About Amish Farmers Amish Farmers, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 19-36391) on Dec. 30, 2019. The petition was signed by Jacek Cholko, president. The case is assigned to Judge Timothy A Barnes. The Debtor is represented by Ben Schneider at Schneider & Stone. At the time of filing, the Debtor had $100,001 to $500,000 in estimated assets and $500,001 to $1 million in estimated liabilities. ANTERO RESOURCES: Fitch Cuts LT IDR to BB- & Alters Outlook to Neg. ------------------------------------------------------------------- Fitch Ratings downgraded Antero Resources Corporation's Long-Term Issuer Default Rating (IDR) to 'BB-' from 'BB+', and downgraded AR's senior unsecured debt to 'BB-'/'RR4' from 'BB+'/'RR4'. Additionally, Fitch has downgraded the senior secured revolver to 'BB+'/'RR1' from 'BBB-'/'RR1'. The Rating Outlook has been revised to Negative from Stable. The downgrade reflects the company's limited market access in the context of its large maturity wall and weak natural gas and NGL prices, near-term negative FCF linked to plans to grow into unused pipeline commitment; and execution risk on portions of the company's proposed asset sales programs. These negatives are partly offset by the company's class leading (but shrinking) hedge coverage, large size, high quality acreage position in the Marcellus/Utica, access to higher priced NGL exports through Mariner East and partially executed program to lower cash costs by $0.35/mcfe by mid-2022 through a range of efficiency measures and volume growth. While there is some execution risk, Fitch believes the company has adequate ability to address its nearest 2021 maturity through asset sales, particularly its AM stake, and potential royalty interest sales. If the company does not address this issue on a timely basis, the rating could see additional negative actions. KEY RATING DRIVERS Elevated Refinancing Risk: AR has a sizable large maturity wall due between 2021 and 2023 ($2.85 billion, starting with its $1.0 billion 5.375% note due 2021). The unsecured bond markets have remained closed to the company, even as select peers have tapped it during a brief window opening in January (EQT and RRC). AR's maturity wall coincides with a step-down in the company's hedge coverage at the end of 2021, which underscores the need to address the wall prior to the end of that period. Fitch anticipates that failure to address the company's 2021 maturity via asset sales or other means by the end of August of this year would result in additional negative rating action. Fluid Plan: Fitch expects the company will use a combination of asset sales, debt repayment, and secured (or, to the degree it becomes available, unsecured) debt capacity to address its maturity wall over the next few years. There is significant uncertainty as to the form and timing of the company's refinancing. While the unsecured markets have been closed to the company, management has stated its preference to issue unsecured debt, which could prolong the refinancing issue. Currently AR has reasonable secured capacity (at 3Q19, borrowings on its $2.5 billion RBL were $275 million, and LOCs were $703 million, for remaining availability of approximately $1.52 billion). In addition, the company's bond covenants, in particular its permitted liens clauses, are less restrictive and allow the potential issuance of new secured debt. Adequate Near Term Self Help: AR announced a number of self-help measures to improve its credit profile, including near term asset sales to de-lever, improvements in its cost structure, and growth to meet its unfilled firm transportation commitments and accelerate positive FCF. Fitch believes the $750 million-$1.0 billion asset sales program is achievable, but has execution risk. AR's 31% stake in Antero Midstream (AM) is liquid and publicly traded, but has been negatively impacted by weak natural gas prices. This stake has recently traded in the $800 million-$850 million range. If liquidated, this alone would cover most of the 2021 maturity. The sale of royalty interests is also viable given recent market transactions, including RRC. Leasing acreage and producing property sales may be more challenging given depressed valuations for Appalachian gas assets and the limited number of potential buyers. Fitch views hedge monetization as less likely given its importance in supporting the company's growth profile in 2020 and 2021. Gas Hedges: AR has a peer-leading (although eroding) gas hedge book, which insulates it from the sub-$2.00/mcf collapse in gas prices brought on by oversupply and a warm northern hemisphere winter. After recent hedge restructuring, current coverage is 91% of expected gas production in 2020 at $2.87/mcf and 89% of 2021 production at $2.80/mcf. AR's hedge book had a positive MTM of $807 million at Sept. 30, 2019. AR's hedges cover its two year expansion plan in 2020 and 2021, and compares favorably to peers SWN (59% coverage in 2020 at $2.62/mcf, 22% coverage in 2021 at $2.55/mcf), and RRC (62% coverage in 2020 at $2.62/mcf, and just 3% coverage in 2021 at $2.62/mcf). AR has also selectively hedged its NGLS, including 32% of C3+ in 2020. The step down in AR's gas coverage coincides with its maturity wall which comes due beginning November 2021. Higher NGL Exposure: AR has outsized exposure to NGLs given its status as the second largest NGLs producer in the US. While NGL prices collapsed in 3Q19 due to oversupply issues and weak demand for propane as a heating fuel, they are not fully correlated to natural gas, due to basis (Northeast versus Gulf coast), and because of non-heating related demand (propane for crop drying, butanes for octane blending in the gasoline pool). AR also gets uplift from its export capacity, which includes the Mariner East 2 pipeline export capacity (11,500 bpd for ethane and 50,000 bpd of C3+ capacity). NGLs have historically given the company product diversification and a margin boost versus more dry-gas oriented peers. Negative FCF: Unlike most peers, AR chose to pursue growth in the current downturn in order to fill unfilled transportation commitments. AR plans to grow production aggressively in 2020 and 2021 (8-10% per year) before tailing off in 2022. The company is protected by robust gas hedges over this period, but faces extension risk on hedges, absent a price recovery. Because of its transportation commitments, AR also has elevated cash costs versus peers, although its netbacks are also higher due to higher export access. AR expects to lower its cash costs by $0.35/mcfe by mid-2022 through a combination of volume efficiencies, LOE and G&A savings, and lower net marketing expense. As calculated by Fitch, as of Sept. 30, 2019, AR's cash netbacks stood at just $1.97/boe, above liquids-rich Appalachian peers RRC ($1.45/boe) and SWN ($1.25/boe), but below EQT ($2.90/boe) and CNX ($4.82/boe). Under Fitch's base case, the agency anticipates the company's FCF will turn up significantly in 2022 as growth ends and AR is able to lower capex close to maintenance levels. DERIVATION SUMMARY With total 3Q19 production of 561,167 boepd, AR is above average in size when compared to Appalachian gas peers RRC (NR, 374,000 boepd), SWN (BB/Negative Outlook 365,900 boepd), and CNX (BB/Stable 232,400 boepd), but smaller than EQT (BBB-/Negative Outlook, 689,900 boepd). AR's basin diversification is limited but the company is significantly more levered to liquids (NGLs) than its Appalachian peers (AR: 32%, RRC: 30%, SWN: 22%, CNX: 6%, EQT: 5%). Among its peers, AR's natural gas hedge coverage is also peer-leading, with 91% coverage for 2020 natural gas production and 89% for 2021 at $2.87/mcf and $2.80/mcf, respectively; however, coverage continues to erode with the passage of time. AR's current cash netbacks are depressed from the recent collapse in natural gas and NGLs, but have historically been above average versus peers. At Sept. 30, 2019, AR's netbacks were $1.97/boe, above liquids rich peers like RRC ($1.45/boe) and SWN ($1.25/boe), but below EQT ($2.90/boe) and CNX ($4.82/boe). AR has highest refinancing risk versus peers given its large maturity wall ($2.85 billion due 2021 to 2023), and continued weak market access. No parent-subsidiary linkage, country ceiling constraint or operating environment influence was in effect for these ratings. KEY ASSUMPTIONS - Henry Hub gas price of $2.50/mcf flat across the forecast; - WTI oil price of $57.50/bbl in 2020, and $55/bbl thereafter; - Realized NGLs prices (including ethane) declining from $27.3/barrel in 2019 to $22.2/barrel in 2020, and rising to $24.3/barrel by the end of the forecast; - Production of 3.23 Bcfe/d in 2019, 3.52 Bcfe/d in 2020, 3.84Bcfe/d in 2021, and 3.96 Bcfe/d in 2022; - Capex of $1.23 billion in 2020 and 2021, which then falls off to $900 million in 2022 as the company fills its unused pipeline capacity commitments; - $120 million water earn-out from AM received in 2020; - No equity buybacks across the forecast. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - Progress towards completing asset sales and the related repayment or refinancing of maturity wall; - Sustained recovery in natural gas and/or NGLs prices, leading to improved market access; - Sustained debt/EBITDA below 2.5x; - Sustained FFO adjusted leverage below 2.75x. Developments That May, Individually or Collectively, Lead to Negative Rating Action - Lack of progress towards addressing 2021 notes prior to the end of August of this year; - Further weakening in market access, including reduced bank support; - Sustained debt/EBITDA above 3.0x; - Sustained FFO adjusted leverage above 3.25x. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: AR has historically maintained adequate liquidity, with a profile composed of modest cash on the balance sheet and a large revolving credit facility supported by a reserve-linked borrowing base. The revolver is subject to redeterminations at least annually, with the next redetermination April 2020. At Sept. 30, 2019, the borrowing base was $4.5 billion, and total lender commitments were $2.5 billion (increased to $2.64 billion with the addition of RBC as a lender with a $140 million commitment in October). At Sept. 30, 2019, AR had $275 million in borrowings and $703 million in LoCs outstanding for remaining availability of approximately $1.52 billion. The revolver maturity date is the earlier of Oct. 26, 2022, or 91 days prior to the earliest redemption date of any of AR's senior notes, unless refinanced. If AR's $1.0 billion 5.375% senior note due Nov 2021 is not redeemed, the maturity of the revolver would accelerate to August 2021. While Fitch expects the company will be able to address its 2021 maturities, Fitch also expects the issue of the company's maturity wall is likely to take multiple quarters to resolve. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of 3 - ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. APX GROUP: S&P Rates New $500MM Sr. Secured Notes 'B-' ------------------------------------------------------ S&P Global Ratings assigned its 'B-' issue-level rating and '3' recovery rating to APX Group Inc.'s (aka Vivint) proposed $500 million senior secured notes due in 2027. The '3' recovery rating indicates S&P's expectation for meaningful recovery (50%-70%; rounded estimate: 55%) in the event of a payment default. The company will use the proceeds from the issuance of $500 million senior secured notes, along with the proceeds from the recent $100 million upsizing of its existing first lien term loan, from $802 million to $902 million, for the following purpose: -- To repay the $270 million outstanding on the existing 8.875% senior secured notes due 2022, -- For partial repayment of $73 million out of $900 million 7.875% Senior Secured Notes due 2022, -- To pay its $134 million of outstanding borrowings on the first-lien revolving credit facility due 2021(not rated), and -- To improve the company's cash balances to $119 million. These transactions will help the company to address its short-term debt maturities and improve near term liquidity. S&P's 'B-' issuer credit rating on Vivint is unchanged and reflects the company's narrow focus, limited geographic diversification, and elevated leverage while competing in the highly fragmented U.S. residential alarm monitoring industry. S&P's expectations include, among other things, increased competition in the core residential alarm monitoring market from multiservice operators and do-it-yourself (DIY) offerings from the likes of Amazon.com Inc. and Alphabet Inc.'s Google and high financial policy risk given the financial sponsor Blackstone continues to own more than 55% of Vivint's equity. Partially offsetting these risks is APX's number two market position amongst residential alarm monitoring companies in North America based on recurring monthly revenue (RMR), strength of the Vivint brand in the smart-home segment, coupled with strong subscriber growth trends. The stable outlook reflects S&P's expectation that Vivint's operating performance will remain steady as it reduces net subscriber acquisition costs and improves margins, although free operating cash flow will likely remain negative over the next 12 months. S&P expects Vivint to maintain adequate liquidity and display moderate margin expansion as it realizes benefits from subscriber acquisition cost efficiencies. ARABIE TRUCKING: Plan Solicitation Deadline Extended to April 10 ---------------------------------------------------------------- Judge Jerry Brown of the U.S. Bankruptcy Court for the Eastern District of Louisiana extended to April 10 the deadline for Arabie Trucking Services LLC, Sugarland Express LLC and TAK Enterprises, LLC to solicit acceptances for their Chapter 11 plan of reorganization and disclosure statement. The companies have until today to file their plan and disclosure statement. About Arabie Trucking Services TAK Enterprises, LLC, filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code on June 4, 2019. Arabie Trucking Services, LLC, Sugarland Express, LLC, sought Chapter 11 protection (Bankr. E.D. La. Lead Case No. 19-11603) on June 13, 2019. The Debtors were granted joint administration by order dated June 21, 2019 with ATS as the lead case. In the petition signed by its CEO, Sandie J. Arabie, Arabie Trucking Services was estimated to have assets of less than 50,000 and liabilities of less than $500,000. The Debtor tapped Douglas S. Draper, Esq., at Heller, Draper, Patrick, Horn & Manthey, LLC, as counsel. ARAMARK SERVICES: Moody's Affirms Ba2 CFR, Outlook Negative ----------------------------------------------------------- Moody's Investors Service affirmed Aramark Services, Inc.'s corporate family rating at Ba2, probability of default rating at Ba2-PD, senior secured at Ba1 and senior unsecured at Ba3. The Speculative Grade Liquidity rating is maintained at SGL-1. The outlook remains negative. "Sluggish economic conditions or investment in new customers or contracts could pressure revenue growth and profit margins while leverage is stuck at around 4.8 times as of December 27, 2019 despite over $500 million of debt repaid in 2019," said Edmond DeForest, Moody's Vice President and Senior Credit Officer. RATINGS RATIONALE The Ba2 CFR reflects Aramark's diminished profitability, with EBITA margins in FY 2019 (ended September) down to 5.9% from 6.9% in FY 2018 and high debt to EBITDA that Moody's anticipates will return to below 4.5 times in fiscal 2020. Moody's expects 1% to 2% annual organic revenue growth. Profit margin expansion could be driven by in-process expense management initiatives and the remaining unrecognized cost benefits from the 2018 acquisition of Ameripride Services Inc. ("Ameripride"). The 100 basis point profit margin decline in 2019 was driven by factors including higher-than-anticipated incentive compensation and other payroll-related expenses. Investments in new products and services could delay the pace of profit rate recovery in 2020. Around $400 million of free cash flow expected can fund debt repayment. All financial metrics cited reflect Moody's standard adjustments. Moody's considers Aramark's business stable and predictable, with long term contracts and fixed asset investments providing high revenue visibility and meaningful competitive barriers. Competition from larger companies in the food and related and uniform services markets or economic pressures including labor tightness in its core US markets could slow revenue growth and the reversal of recent profit margin compression. Organic revenue growth will be driven by modest price increases with existing customers, new client additions and new products. Aramark's food service and uniform and related services face a diverse set of food safety and waste water handling rules and regulations. Aramark has a track record of complying with applicable laws. Aramark maintains job-appropriate training of its large employee base and board oversight of its risk management practices. As a public company, Aramark provides transparency into its governance and financial results and goals. The board of directors is controlled by independent directors. In late 2019, there were 5 director and several officer changes, including of the Chairman, CEO and CFO. The acquisitions of uniform services provider Ameripride for $1.0 billion in January 2018 and group purchasing organization ("GPO") Avendra Ltd. ("Avendra") for $1.35 billion in December 2017 were funded entirely with debt. Its Healthcare Technologies business was sold for $293 million in 2018. Among Aramark's stated near term capital allocation priorities are net financial leverage reduction and cash returns to shareholders. Moody's considers Aramark's financial strategies as evolving. The Ba1 rating on the senior secured credit facilities reflects their priority position in the debt capital structure and a Loss Given Default assessment of LGD3. The notes are secured by a first lien pledge of substantially all of the company's domestic assets (excluding accounts receivable pledged for the securitization facility) and 65% of the stock of direct foreign subsidiaries. The Ba1 rating, one notch above the Ba2 CFR, benefits from loss absorption provided by the junior ranking debt and non-debt obligations. The Ba3 rating on the senior unsecured notes reflects a loss given default assessment of LGD5. The senior notes are guaranteed by substantially all of the domestic subsidiaries of the company (excluding the securitization subsidiaries). The loss given default assessment reflects effective subordination to all the secured debt and certain trade claims at default. A decline in the proportion of unsecured to total debt could lead to a downgrade of the unsecured ratings to B1. The SGL-1 speculative grade liquidity rating reflects Aramark's very good liquidity profile. Moody's expects free cash flow of around $400 million in fiscal 2020 and significant availability under the $1 billion revolving credit facility maturing in 2023. The company also has up to $500 million available from an accounts receivable securitization facility maturing in 2021. The revolving credit facilities have a net senior secured debt to EBITDA covenant, but ample covenant headroom over the next four quarters is anticipated. The negative outlook reflects Moody's concerns that sluggish economic conditions or investment in new customers or contracts could pressure revenue growth or profit margins and leave financial leverage high. As a result, key credit metrics could remain unfavorable against Moody's downward rating thresholds. The outlook could be revised to stable from negative if Moody's expects Aramark will maintain: 1) 1% to 2% revenue growth; 2) EBITA margins above 6%; and 3) debt to EBITDA around 4.0 times. Given the negative ratings outlook, an upgrade in the near term is not likely. However, the ratings could be upgraded if Moody's expects Aramark will maintain: 1) debt to EBITDA below 3.5 times; 2) EBITA margins above 7%; 3) improved free cash flow; and 4) a commitment to conservative financial strategies. The ratings could be downgraded if Moody's expects: 1) revenue growth to slow; 2) EBITA margins to remain below 6%; or 3) debt to EBITDA to be maintained around 4.5 times or higher. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Issuer: Aramark Services, Inc. Corporate Family Rating, Affirmed Ba2 Probability of Default Rating, Affirmed Ba2-PD Senior Secured Bank Credit Facility, Affirmed Ba1 (LGD3) Senior Unsecured Regular Bond/Debenture, Affirmed Ba3 (LGD5) Outlook, Remains Negative Issuer: ARAMARK Canada Ltd. Senior Secured Bank Credit Facility, Affirmed Ba1 (LGD3) Outlook, Remains Negative Issuer: Aramark International Finance Sarl Senior Unsecured Regular Bond/Debenture, Affirmed Ba3 (LGD5) Outlook, Remains Negative Issuer: Aramark Investments Limited Senior Secured Bank Credit Facility, Affirmed Ba1 (LGD3) Outlook, Remains Negative Aramark, based in Philadelphia, PA, is a provider of food and related services to a broad range of institutions and the second largest provider of uniform and career apparel in the United States. Moody's expects fiscal 2020 (ends September) revenue of over $16 billion. ASTRA ACQUISITION: Moody's Gives B3 CFR & Rates First Lien Debt B2 ------------------------------------------------------------------ Moody's Investors Service assigned initial ratings to Astra Acquisition Corp., including: a B3 corporate family rating; a B3-PD probability of default rating; B2 ratings to new first-lien debt instruments including a $40 million revolving credit facility and a $325 million term loan; and a Caa2 instrument rating a new, $110 million second-lien term loan. Proceeds from the term loans plus rolled over equity from existing owner Leeds Equity Partners and new equity from Veritas Capital will be used to fund the acquisition of Astra, satisfy transaction fees and expenses, and allocate $40 million of cash to the new company's balance sheet. The outlook is stable. Assignments: Issuer: Astra Acquisition Corp. Probability of Default Rating, assigned B3-PD Corporate Family Rating, assigned B3 First-lien, revolving credit facility expiring 2025, assigned B2 (LGD3) First-lien, senior secured term loan maturing 2027, assigned B2 (LGD3) Second-lien, senior secured term loan maturing 2028, assigned Caa2 (LGD 5) Outlook is stable RATINGS RATIONALE Astra's credit profile reflects exceptionally high Moody's-adjusted debt-to-EBITDA leverage that it anticipates will ease only towards 9.0 times by the end of 2020, still weak given its small, $200 million revenue scale and acquisition-integration challenges stemming from a private equity sponsor bringing together two modestly profitable companies to form the borrower. Campus Management ("CMC") and Edcentric have no operating history together and compete against large incumbent players such as Oracle and Sophia/Ellucian. Even with management's substantial adjustments to earnings, the combined company's EBITDA margin is modest for a software company. Risks posed by scale and leverage are somewhat offset by steady subscription and maintenance revenues, which provide an 80% recurring revenue base, and its expectations for moderately positive free cash flow. CMC provides student information systems ("SIS"), constituent relationship management ("CRM"), and ERP solutions for managing the higher education student lifecycle, while Edcentric provides SaaS-based compliance, student engagement, and fundraising services. There is only moderate customer overlap between the two companies, and little product overlap, which should allow for effective cross-selling, supporting its expectations for nearly 10% annual revenue growth. Management sees Astra as a disruptive competitor that can win share in a highly penetrated market in which universities are reevaluating their SIS and ERP software needs. Given, however, the important, embedded nature of such software in an institution's overall operation and administration, high switching costs will be a formidable obstacle. Opening liquidity from an initially undrawn $40 million revolver and $40 million of balance sheet cash presents a crucial resource for meeting synergy goals and withstanding prolonged competitive pressures. As a result, Moody's views Astra's liquidity as good, and supportive of the otherwise weakly positioned B3 CFR. Moody's expects Astra to generate free cash flow as a percentage of debt in the low-single digits over the next 12 to 18 months, average for the ratings category. Working capital is heavily seasonal, reflective of an academic year, but is expected to be a modest source of funds annually. Astra faces moderate social and governance risks, the latter primarily the result of aggressive financial strategies implied by private equity ownership. While Veritas and existing owner Leeds Equity are, respectively, contributing and rolling over equity representing fully 47% and 10% of Astra's total capitalization, opening leverage is nevertheless exceptionally high. Astra has some exposure to social risks related to higher education institutions, which are under intense social and potentially regulatory scrutiny because of their admissions practices, high costs, and perceived utility. The stable outlook reflects Moody's expectations for strong revenue growth and continued good liquidity. Moderating integration expenditures should enable the company to translate the large amount of EBITDA adjustments into sustainable increases in earnings and profitability. Meaningful deleveraging will likely not occur over the next 12 to 18 months. Moody's would consider an upgrade if Astra is able to grow and sustain scale at the accelerated pace it anticipates, if free cash flow improves into the mid-single digits as a percentage of debt, and if it expects leverage will moderate towards 7.0 times. Moody's would consider a downgrade if Astra's anticipated revenue growth and margin expansion fail to materialize, pressuring the company's good liquidity. Astra Acquisition Corp. is being formed by the purchase, announced January 16, 2020, of both Campus Management Acquisition Corp. and Edcentric Holdings LLC by private equity firm Veritas Capital. CMC provides SIS, CRM, ERP, and analytic services that help manage the student lifecycle for higher education institutions, while Edcentric provides SaaS-based compliance, assessment, and fundraising services for the higher education market's "student-to-alumni lifecycle". Astra is headquartered in Boca Raton, FL. Moody's expects the company to generate 2020 revenue of just over $200 million. The borrower, Astra Acquisition Corp., is the direct owner of both Campus Management and Edcentric. Astra is 100%-owned by Astra Intermediate Holding Corp., which will be the issuer of consolidated financial statements henceforth. After close of the transaction, Astra Intermediate Holding Corp. will be 81% owned by Veritas, 18% by Leeds Capital (the existing owner of both CMC and Edcentric), and 1% by management. The principal methodology used in these ratings was Software Industry published in August 2018. ASTRA ACQUISITION: S&P Assigns 'B-' ICR on Acquisition by Veritas ----------------------------------------------------------------- S&P Global Ratings assigned its 'B-' issuer credit rating to Astra Acquisition Corp. (Astra) with stable outlook. The rating action follows the company's announcement of an agreement to acquire Campus Management Corp. and Edcentric, which will be combined post-acquisition under the legal entity Astra. The transaction will be funded with a $325 million first-lien term loan due 2027, a $110 million second-lien term loan due 2028, and cash equity from Veritas and Leeds Equity. S&P's rating reflects Astra's substantial financial leverage, narrow end-market focus within the higher education software market, potential disruption from integration of Campus Management and Edcentric, and competition from larger established players. S&P estimates Astra's pro forma leverage at 13.4x as of Dec. 31, 2019, which the rating agency expects will improve to the mid-11x area by the end of 2020 on organic revenue growth and margin expansion. Strengths include a growing education software market, good revenue visibility through a highly recurring revenue model, and strong customer relationships with high renewal rates. The stable outlook reflects S&P's expectation that Astra will be able to grow revenues at or greater than a high-single-digit level and achieve identified cost savings over the next 12 to 24 months. The rating agency expects the company to achieve this while improving its profitability, such that it brings leverage to mid-11x area within 12 months and generates positive free operating cash flow. "We would lower our rating on Astra if we believe that weakening business prospects have rendered the company's capital structure as unsustainable. We would look to negative free cash flow or total liquidity (including revolver availability) below $40 million as key indicators of an unsustainable capital structure. This would likely occur if the company experiences material integration issues, cost overruns, weaker-than-expected revenue growth, deterioration in profitability, or an increasingly aggressive financial policy," S&P said. "Although unlikely over the next 12 months due to high leverage, we would consider an upgrade if the company generates consistent organic revenue growth, has at least a mid-20% adjusted EBITDA margin, and sustains positive free operating cash flow. We would look to see adjusted debt to EBITDA leverage sustained under 6.5x and free operating cash flow (FOCF) to debt in the mid-single-digit percentage range before considering an upgrade," the rating agency said. ATHERTON BAPTIST: Fitch Affirms BB+ Rating on 2016 Revenue Bonds ---------------------------------------------------------------- Fitch Ratings affirmed the 'BB+' rating on Series 2016 revenue bonds issued by Alhambra (CA) on behalf of Atherton Baptist Homes (Atherton). The Rating Outlook is Stable. SECURITY The bonds are secured by a gross revenue pledge, mortgage lien and debt service reserve fund. KEY RATING DRIVERS STABLE FINANCIAL PROFILE: The rating reflects Atherton's strong financial position reflecting 322 days cash on hand (DCOH) and 57.9% cash to debt ratio based on unaudited fiscal 2019 results. Atherton's reserve levels provide the organization with good financial cushion offsetting softer operations in 2019, although still strong for the rating category. Atherton continues to generate stable cash flow and profitability resulting in consistent liquidity growth through fiscal 2019. The rating also reflects consistent demand in Atherton's community offerings as evidenced by its overall healthy occupancy rates over the past several years. Fitch expects Atherton to maintain consistent levels of profitability and liquidity growth over the next couple of years. STRONG OVERALL OCCUPANCY: Atherton's overall occupancy remains good through fiscal 2019, despite softer occupancy from independent living units (ILU) as a result of higher than expected attrition. ILU occupancy was 88.0% at the end of fiscal 2019, relative to a three-year average of 94.4% from 2016 to 2018. However, this was offset by increased occupancy from skilled nursing facility (SNF) beds as a number of residents transitioned to higher levels of care within the organization. Fitch expects occupancy rates to return to historical levels with the number of deposits received in 2019 and year-to-date. CONSISTENT PROFITABILITY: Atherton's operations softened in fiscal 2019 (though still healthy) due partly to high attrition and increased marketing efforts. Despite this, the organization continues to generate healthy profitability and cash flow that contributed to healthy liquidity growth over the past year. Operating ratio and net operating margin (NOM) remains favorable, exceeding below investment grade (BIG) rating expectations. MODERATE LONG-TERM DEBT PROFILE: Atherton's long-term liability profile is moderate with maximum annual debt service (MADS) representing 9% of revenues and debt to net available of 6.1x in fiscal 2019. Debt to net available increased slightly from the prior year due to decreased net entrance fee receipts as result of high turnover, but remains strong relative to 'BB' category expectations. ELEVATED PLANT AGE: Fitch views Atherton's average age of plant as elevated at 16 years as of fiscal 2019. The organization has spent below depreciation with average capital expenditures at 76.1% of depreciation over the past four years. Management is in the planning stages on a number of renovation and remodeling projects expected over the next couple of years. Fitch will evaluate the size and scope of future projects and assess the impact of future capital projects or debt plans as details become more certain. ASYMMETRIC RISK FACTORS: There are no asymmetric risk factors affecting the rating determination. RATING SENSITIVITIES MAINTENANCE OF OPERATIONS EXPECTED: Fitch expects Atherton to maintain operating performance at or above current levels over the medium term. A Positive Outlook or rating upgrade is possible if Atherton maintains operating performance coupled with significant growth in liquidity to levels consist with a higher rating category. Conversely, weakening of operations that result in lower coverage levels or deteriorating liquidity position could lead to negative rating pressures. Additionally, significant addition of debt that would materially weaken leverage metrics to levels that no longer support the 'BB+' rating could lead to a rating downgrade. CREDIT PROFILE Atherton is a Type-C life plan community (LPC) located in Alhambra, CA with 167 Classic ILUs, 50 Courtyard ILUs, 36 ALUs and 99 SNF beds. Total revenue as of unaudited fiscal year-end 2019 (Dec. 31 fiscal year end) was $22.6 million. Atherton offers mostly 90% refundable contracts, while the classic units are predominantly nonrefundable. Summary of Financial Adjustments IMPROVED FINANCIAL PROFILE Atherton's liquidity position continued to strengthen through unaudited fiscal 2019 with $17.4 million in unrestricted cash and investments, 322 DCOH and 57.9% cash to debt. The growth in liquidity was a direct result of stable core operations and consistent cash flow generation over the past few years. Fitch views Atherton's cash reserve levels as sufficient and a credit strength providing the organization with good financial flexibility at the current rating. In addition, MADS coverage remained strong in fiscal 2019 at 2.3x due to healthy net entrance fee receipts. Management continues to focus on building liquidity growth and strengthening its overall financial profile over the next couple of years. Atherton maintains a defined benefit (DB) pension plan that has been frozen since 2013. The DP pension plan was 36% funded with a $2.5 million unfunded status as of Dec. 31, 2018 (latest audited information). The pension plan is not subject to ERISA requirements. Management continues to fund the plan making monthly payments with the goal to significantly reduce the liability over a 15-year period. STRONG OCCUPANCY AND PROFITABILITY EXPECTED Despite a somewhat competitive environment, Fitch views Atherton's price offering as supportive of a strong demand profile and believes they afford the community a good degree of pricing flexibility as average home prices are well above the classic and courtyard entrance fees. Due to high attrition, ILU occupancy declined to 88.0% in fiscal 2019 compared with 95.4% the prior year. This was partly due to residents requiring higher levels of care within the organization as they transitioned to ALU or SNF care. Atherton saw a significant increase in SNF occupancy rates to 98.0% compared with 86.9% the prior year. SNF revenues accounted for about 55% of net resident service revenues and are not highly reliant on Medicare revenue making up only 14.1% of total revenues in fiscal 2019, shielding Atherton from industry pressures on average length of stay. The majority of SNF revenues are private pay representing 60.3% of net revenues in fiscal 2019, but the community also accepts Medi-Cal patients making up 19.3% of net revenues, exposing the community to potential reimbursement pressure. CONTINUED PROFITABILITY EXPECTED Atherton continued to generate profitability in fiscal 2019, reporting an operating ratio of 97.2% and NOM of 6.4%, exceeding BIG medians of 100.7% and 3.8%, respectively. NOM-adjusted was 16.7% as of fiscal 2019 and trailed behind BIG medians of 19.4% due to slightly weaker net entrance fee receipts relative to the prior year. Furthermore, as a result of strong market conditions, Atherton generated $300,000 of realized investment gains in addition to $373,000 in contributions as of unaudited fiscal 2019, which helped boost bottom line margins generating a 4.6% excess margin and exceeded management's budget expectations. Maintenance of operating performance and consistent cash flow generation is expected over the next couple of years and will be necessary to maintain the rating. ELEVATED PLANT AGE As an organization that has been in business for over 100 years, Atherton's community is a mix of old and new buildings reflecting an average age of plant of 16 years as of fiscal 2019. Capital investments in the community have increased over the past year having spent about $2.3 million of capex or 91.6% of depreciation. Longer term, Atherton will need to increase capex in order to maintain its plant age. Fitch understands that management is in the preliminary planning stages on a number of renovation projects over the next couple of years, particularly updating its AL and SNF facilities. Details on the size and scope of the project have yet to be determined. Given its strong financial profile and reserve levels, Fitch views Atherton as having some flexibility to absorb additional debt at the current rating category. Fitch will assess any future capital projects, related debt issuances and its impact on Atherton's credit profile as more details become available. MODERATE LONG-TERM DEBT PROFILE The series 2016 bonds are fixed rate bonds insured by the Cal-Mortgage Loan Insurance Program and guaranteed by the State of California. Bond covenants include 1.25x MADS coverage, 150 days cash on hand and 1.5x current ratio. MADS is $2.1 million and the debt service schedule is level. Atherton's long-term liabilities are moderate with MADS equating to a favorable 9% of fiscal 2019 revenues. Additionally, Atherton's debt to net available of 6.1x as of unaudited fiscal 2019 was favorable compared with BIG medians of 10.9x. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of 3 - ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. BALBOA INTERMEDIATE: S&P Raises ICR to 'B' on Proposed Refinancing ------------------------------------------------------------------ S&P Global Ratings raised its issuer credit rating to 'B' from 'B-' on Balboa Intermediate, (dba TIBCO), which is proposing to refinance its $950 million of unsecured notes, with proceeds from an incremental $360 million add-on to its first-lien term loan due 2026 alongside a new $650 million second-lien term loan due 2028. At the same time, S&P raised its issue-level rating on the company's existing first-lien debt to 'B+' from 'B', which now consists of a $125 million revolving credit facility and a $2.18 billion first-lien term loan. The '2' recovery rating on this debt remains unchanged. S&P also assigned its 'B-' issue-level rating and '5' recovery rating to the second-lien term loan. S&P is not taking action on the company's existing unsecured ratings as the rating agency expects repayment at the close of this transaction. TIBCO continues to reduce its debt leverage, consistent with S&P's expectations, and under the proposed refinancing transaction, the rating agency now sees a lower probability of a debt-financed dividend. TIBCO's leverage continued to modestly improve throughout its fiscal 2019, estimated to be 7.9x for the 12 months ending Nov. 30, 2019. While this proposed refinancing will add about $63 million of incremental debt to the balance sheet, it also reduces refinancing risk and should also lower interest costs by more than $25 million. More importantly, now that TIBCO is addressing its 2021 note maturity with no planned dividend distribution to Vista, S&P believes the risk for a debt-financed dividend is lower and the rating agency is more confident the company will likely maintain leverage below 8x. The stable outlook on TIBCO reflects S&P's expectation that the company will maintain leverage in the mid- to high-7x area over the next year on good demand for its software. The rating agency thinks this will lead to continued growth in net new bookings, modest organic revenue growth, relatively stable EBITDA margins, and at least $125 million of free operating cash flow (FOCF). It also reflects S&P's expectation that the company will continue to maintain consistent financial policies that align with sustaining leverage below 8x. "We could lower our ratings on TIBCO if we expect the company to maintain debt to EBITDA in the low-8x area and or its FOCF to debt ratio below 3%. This is likely to occur because of weaker-than-expected operating performance from increased industry competition or customer attrition leading to EBITDA contraction, or unexpected debt-financed acquisitions or shareholder returns," S&P said. "Although unlikely, we could raise our rating on TIBCO if stronger-than-expected operating performance and a more conservative financial policy leads us to believe the company will likely maintain leverage below 6x," the rating agency said. BELLEAIR RESERVE: Case Summary & 5 Unsecured Creditors ------------------------------------------------------ Debtor: Belleair Reserve Holdings LLC 1508 Grandview Drive Tarpon Springs, FL 34689 Business Description: Belleair Reserve Holdings LLC is a real estate development and full custom home construction company. Chapter 11 Petition Date: February 11, 2020 Court: United States Bankruptcy Court Middle District of Florida Case No.: 20-01160 Debtor's Counsel: David W. Steen, Esq. DAVID W. STEEN, P.A. PO Box 270394 Tampa, FL 33688-0394 Tel: (813) 251-3000 E-mail: dwsteen@dsteenpa.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by Torrey K. Cooper, manager member. A copy of the petition containing, among other items, a list of the Debtor's five unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/SGsVLI BIOSTAGE INC: James McGorry Quits as Chief Executive Officer ------------------------------------------------------------ James McGorry resigned from his role as chief executive officer of Biostage, Inc. as well as a member of its Board of Directors, effective as of Feb. 7, 2020. In connection with his resignation, the Company and Mr. McGorry entered into a Separation and Release Agreement which provides, among other things: (i) that Mr. McGorry will receive six months of his base salary paid in equal monthly installments over the course of twelve months; (ii) a grant of a fully vested non-qualified stock option to purchase 80,000 shares of common stock of the Company with an expiration date eighteen months following the effective date of his resignation, (iii) acceleration of vesting of certain outstanding equity awards; and (iv) that the outstanding vested options would be exercisable until the earlier of eighteen months following such effective date and the respective scheduled expiration date of those options. In addition, Matthew Dallas resigned as a member of the Board of Directors and audit committee of Biostage on Feb. 3, 2020. Mr. McGorry's and Mr. Dallas' resignations from the Board were not the result of any disagreements with the Company on any matter relating to the Company's operations, policies or practices, according to a Form 8-K filed with the Securities and Exchange Commission. About Biostage Headquartered in Holliston, Massachusetts, Biostage, Inc., formerly Harvard Apparatus Regenerative Technology, Inc. -- http://www.biostage.com-- is a biotechnology company developing bioengineered organ implants based on its novel Cellframe technology. The Company's Cellframe technology is comprised of a biocompatible scaffold that is seeded with the patient's own stem cells. The Company's Cellspan technology combines a proprietary, biocompatible scaffold with a patient's own cells to create an esophageal implant that could potentially be used to treat pediatric esophageal atresia and other conditions that affect the esophagus. Biostage reported a net loss of $7.53 million for the year ended Dec. 31, 2018, compared to a net loss of $11.92 million for the year ended Dec. 31, 2017. As of Sept. 30, 2019, the Company had $2.06 million in total assets, $941,000 in total liabilities, and $1.12 million in total stockholders' equity. In its report dated March 29, 2019, RSM US LLP, in Boston, Massachusetts, the Company's auditor since 2018, issued an opinion on the Company's consolidated financial statements for the year ended Dec. 31, 2018, expressing substantial doubt about the Company's ability to continue as a going concern. The auditor stated that the Company has suffered recurring losses from operations, has an accumulated deficit, uses cash flows in operations, and will require additional financing to continue to fund operations. BL RESTAURANTS: U.S. Trustee Forms 5-Member Committee ----------------------------------------------------- The U.S. Trustee for Region 3 on Feb. 5, 2020, appointed five creditors to serve on the official committee of unsecured creditors in the Chapter 11 cases of BL Restaurants Holding, LLC and its affiliates. The committee members are: (1) A&Z Novi LLC Attn: Anthony Marougi 6630 Oak Hills Drive Bloomfield Hills, MI 48301 Phone: 248-217-1307 (2) Edward Don & Company Attn: John Fahey 9801 Adam Don Pkwy Woodridge, IL 60517 Phone: 708-883-8362 Fax: 866-299-3038 (3) NCR Corporation Attn: Mark Rogers 864 Spring Street Atlanta, GA 30308 Phone: 470415-8614 Fax: 404-487-4989 (4) Brookfield Property REIT, Inc. Attn: Julie Minnick Bowden 350 N. Orleans St., Suite 300 Chicago, IL 60654-1607 Phone: 312-960-2707 Fax: 312-442-6374 (5) Bradley Alverson Attn: c/o Joseph Fitapelli Fitapelli & Schaffer, LLP 28 Liberty Street, Fl. 30, Suite 3080 New York, NY 10005 Phone: 212-300-0375 Fax: 212-481-1333 Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About BL Restaurants Founded in 1991, BL Restaurants Holding, LLC operates gastrobars at various locations including lifestyle centers, traditional shopping malls, event locations, central business districts and other stand-alone specialty sites. BL Restaurants and three affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 20-10156) on Jan. 27, 2020. At the time of the filing, the Debtors estimated assets of between $50 million and $100 million and liabilities of between $100 million and $500 million. The petitions were signed by Howard Meitiner, chief restructuring officer. The Debtors tapped Klehr Harrison Harvey Branzurg LLP as legal counsel; Configure Partners LLC as investment banker; Carl Marks Advisory Group LLC as restructuring advisor; and Epiq Bankruptcy Solutions Inc as notice and claims agent. BUCKEYE PARTNERS: Fitch Rates New Unsec. Notes Due 2025/2028 'BB' ----------------------------------------------------------------- Fitch Ratings assigned a 'BB'/'RR4' rating to Buckeye Partners. L.P.'s proposed offering of 2025 and 2028 senior unsecured notes. The bond offering is being done in conjunction with a tender offer for $650 million of notes due 2021. Proceeds will be used for the tender offer, to pay down borrowings on the senior secured revolver and for general corporate purposes. Fitch currently rates Buckeye's Long-Term Issuer Default Rating 'BB' and the Outlook is Stable. KEY RATING DRIVERS Leverage to Improve: With the additional debt at Buckeye to finance going private, Fitch expects 2019 year-end leverage to be in the range of 6.2x to 6.8x. By year-end 2020, leverage should be closer to 6.0x or better. Provided that no dividends are paid to IFM and EBITDA can increase, Fitch forecasts leverage to be approximately 5.0x by year-end 2021. Recent Transactions: Buckeye recently agreed to purchase three terminals from Magellan Midstream Partners LP for $250 million. Buckeye believes these assets generated approximately $27 million of EBTIDA in 2019. Separately, IFM has agreed to contribute its 57.6% stake in FLNG Liquefaction 2, LLC's Train 2 (FLIQ2; IDR BBB/Stable) to Buckeye. This contribution is expected to provide Buckeye with annual distributions in the range of $100 million to $130 million according to management. Diverse Geography and Assets: Buckeye's assets are located throughout the U.S. and in the Caribbean. The primary locations in the U.S. include Chicago, New York Harbor and the Gulf Coast. In the Caribbean, its assets are primarily in the Bahamas and it also has assets in Puerto Rico and St. Lucia. For the LTM ending third-quarter 2019 (3Q19), Buckeye attributes 64% of its pro forma EBITDA to its domestic pipelines and terminals, 34% to global marine terminals. The remaining 2% comes from its merchant services segment. Segregated Storage: For some time, Buckeye has seen weakness in segregated storage. Fitch does not expect segregated storage to see improved results in the near term. This has hurt results in the global marine terminal segment despite strong results from Buckeye Texas Partners. There has been a decline in the domestic pipelines and terminals business yet its deterioration is not as severe as global marine terminals. Growth Projects: Buckeye has been investing in a number of projects. Spending for an expansion at its Chicago complex was approximately $70 million and it was placed into service in mid-2019. The project is backed by a long-term contract with a strong counterparty. Results in 2020 are expected to benefit from the completion of the second phase of the Michigan to Ohio expansion, which was placed in service on Oct. 1, 2019. It is also backed by long-term contracts. Buckeye is also investing in the South Texas Gateway Terminal, which is a joint venture with Phillips 66 Partners LP and Marathon Petroleum Corp. This is an export terminal in the Corpus Christi ship channel and it will be constructed and operated by Buckeye. Buckeye expects its capex contribution to the project to be approximately $325 million. Through Sept. 30, 2019, its net investment was $99 million. This project is also backed by long-term commitments which will provide steady cash flows. South Texas Gateway is expected to begin partial operations and start the ramp up by mid-2020. DERIVATION SUMMARY The 'BB' rating reflects Buckeye's diverse asset base, size and scale, and elevated leverage with the addition of the secured debt. For year-end 2019, the company has a higher leverage profile than its investment-grade peers that operate in the crude oil, refined products pipelines and storage terminal segments, such as Plains All American LP (PAA). Fitch forecasts Buckeye's leverage (defined as total debt to adjusted EBITDA with debt adjusted for equity credit) at 2019 year-end to be in the range of 6.2x to 6.8x. By year-end 2020, leverage should be closer to 6.0x or better. Provided that no dividends are paid to IFM and EBITDA can increase, Fitch forecasts leverage to be approximately 5.0x by year-end 2021. This is significantly higher than Fitch's 2019 leverage forecast for PAA. NuStar is another 'BB' issuer and it is smaller and less diverse than Buckeye, which has the advantage of size and scale that provides operational and geographic diversification. Fitch expects NuStar's leverage to be around 5.5x by yearend 2019 and to decrease to 4.4x and 4.8x by yearend 2021. Buckeye's leverage is higher than similarly rated 'BB' midstream energy issuers like Sunoco, LP and AmeriGas Partners, LP. Fitch expects Sunoco to have 2019 YE leverage in the 4.5x to 5.0x range and AmeriGas Partners, LP to have leverage in the range of 4.2x to 4.5x at the end of fiscal 2020. KEY ASSUMPTIONS Fitch's Key Assumptions Within the Rating Case for the Issuer - Adjusted EBITDA growth comes from organic projects as well as recent transactions (the terminal acquisition and cash distributions from FLIQ2); - No dividends are paid to Buckeye's sponsor, IFM, in Fitch's forecast period which extends through 2022. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Favorable rating action is not expected in the near term; however, Fitch may take positive rating action if leverage (defined as total debt/adjusted EBITDA and debt adjusted for equity credit) falls below 5.0x for a sustained period of time. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Negative rating action may occur if Fitch forecasts leverage (defined as total debt/adjusted EBITDA and debt adjusted for equity credit) to be at or above 6.0x by the end of 2021. LIQUIDITY AND DEBT STRUCTURE Adequate liquidity: As of Jan. 31, 2020, Buckeye had $140 million drawn on its $600 million secured revolver due in 2024. Letters of credit were approximately $3 million. With proceeds from the proposed bond offering, Buckeye intends to repay revolver borrowings. In addition, proceeds from the bond offering are being used for a tender offer of the nearest debt maturity, which is February 2021. SUMMARY OF FINANCIAL ADJUSTMENTS Buckeye has $400 million of junior subordinated debt that meets Fitch's criteria for 50% equity credit. Cash distributions from FLIQ2 will be added to adjusted EBITDA (equity earnings will be excluded). ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of 3. ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. BUCKEYE PARTNERS: Moody's Rates New $1BB Unsecured Notes 'B1' ------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Buckeye Partners, L.P.'s proposed $1 billion unsecured notes due 2025 and 2028. The notes proceeds are expected to be used to tender for $650 million unsecured notes due February 2021, to repay revolver balances, and for general corporate purposes, including acquisitions. Buckeye's other ratings remained unchanged. "Buckeye's bond offering will extend its maturity profile with little impact on leverage, while enhancing revolver liquidity and removing its near-term refinancing risk," said Arvinder Saluja, Moody's Vice President. Assignments: Issuer: Buckeye Partners, L.P. Senior Unsecured Notes, Assigned B1 (LGD5) RATINGS RATIONALE Buckeye's proposed and existing senior unsecured notes are rated B1, one notch below the assigned Ba3 Corporate Family Rating (CFR), due to their structural subordination to the company's first lien senior secured credit facilities. The company's junior subordinated notes are rated B2 reflecting their subordinated position relative to the secured and unsecured debt in the capital structure. The Ba1 ratings on Buckeye's first lien senior secured credit facilities are two notches higher than the Ba3 CFR, and reflect the instruments' priority position in the capital structure and the benefit of the loss absorption provided by the unsecured debt below them. Buckeye's Ba3 CFR reflects the company's high financial leverage after the late 2019 completion of its going-private acquisition by IFM Global Infrastructure Fund (IFM, unrated). Buckeye would need to demonstrate meaningful leverage reduction through a combination of earnings growth boosted by growth projects and debt repayment in order for further credit accretion. Buckeye's financial strategy under IFM's ownership is viewed as being less conservative than it has historically been as evidenced by the high leverage and introduction of secured debt in the capital structure. Nonetheless, Buckeye's CFR is supported by the company's significant scale and its stable refined product pipelines and complementary terminals that form the majority of its assets and cash flow. Buckeye intends to continue to pursue growth through accretive projects. The CFR also incorporates Moody's understanding that IFM will not take distributions over the next few years while the company focuses on deleveraging. Buckeye's ratings could be downgraded if the company's financial policies become more aggressive, including further debt funded acquisitions or near-term distributions to the owner. Additionally, Moody's could downgrade the ratings if the company's liquidity deteriorates or if debt to EBITDA is sustained above 6x beyond 2020. Moody's could upgrade the ratings if Buckeye generates meaningful positive organic growth, and leverage approaches 5.5x. Buckeye Partners L.P., is a midstream company based in Houston, Texas. The company's core, legacy assets are its refined products pipeline systems in the Northeast and Midwest, including complementary terminals. The company also has wholesale fuel distribution and marketing and domestic and international terminaling facilities. The principal methodology used in these ratings was Midstream Energy published in December 2018. BUCKEYE PARTNERS: S&P Rates New $1BB Senior Unsecured Notes 'BB' ---------------------------------------------------------------- S&P Global Ratings assigned its 'BB' issue-level rating and '3' recovery rating to Buckeye Partners L.P.'s proposed $1 billion aggregate senior unsecured notes due 2025 and 2028. The '3' recovery rating indicates S&P's expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a payment default. The company intends to use the net proceeds from these notes to tender its $650 million 4.875% notes due 2021, repay outstanding debt under its credit facility, and for general corporate purposes. CASCADES OF GROVELAND: Hires DeRango Best as Real Estate Appraiser ------------------------------------------------------------------ The Cascades of Groveland Homeowners' Association, Inc. received approval from the U.S. Bankruptcy Court for the Middle District of Florida to employ DeRango, Best & Associates as its real estate appraiser. The firm will conduct an appraisal of the Debtor's clubhouse known as the Magnolia House located at 100 Falling Acorn Ave., Groveland, Fla. The property has various amenities including a private restaurant, which is also owned by the Debtor. DeRango will receive $12,000 for the initial appraisal, including preparation of the appraisal report. The firm has required a retainer of $6,000 upon approval of its employment by the court and another $6,000 upon completion of the report. Additional services such as litigation support services will be billed at the firm's standard hourly rates. Daniel Derango, the firm's president who will be primarily responsible for providing the services, charges an hourly fee of $275. His staff will charge $75 per hour. Mr. Derango assures the court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Dan Derango DeRango, Best & Associates 1601 East Amelia Street Orlando, FL 32803 Phone: (407) 895-6650 Fax: (407) 898-8467 About The Cascades of Groveland Homeowners' Association The Cascades of Groveland Homeowners' Association, Inc., is a non-profit homeowner's association operating under Chapter 720, Florida Statute's. The Association's homeowners constitute a community known as "Trilogy Orlando" located in Groveland, Fla. The Cascades of Groveland Homeowners' Association sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-04077) on June 21, 2019. In the petition signed by Brian Feeney, president, the Debtor estimated assets of between $1 million and $10 million and liabilities of the same range. Judge Karen S. Jennemann oversees the case. The Debtor tapped Nardella & Nardella, PLLC as bankruptcy counsel, and Weiss Serota Helfman Cole & Bierman, P.L. and Becker & Poliakoff, P.A. as special counsel. CATHERINE COURTS: Wins Final Court Nod on Use of Cash Collateral ---------------------------------------------------------------- Judge Timothy A. Barnes authorized Catherine Courts Condominium, LLC to use cash collateral on a final basis (until entry of an order terminating such use), pursuant to the budget. The Court ruled that: a. Parkway Bank will be granted, effective as of the Petition Date, valid, binding and properly perfected post-petition security interests and replacement liens on the pre-petition collateral. b. Parkway is authorized to sweep the Debtor's bank account on a monthly basis for $52,791.37 plus the budgeted tax escrow payment in the amount of $19,305.39, as adequate protection payment. c. the Debtor is authorized to reduce the monthly adequate protection payment to Parkway as need to replenish the cash collateral cushion, should the Debtor's ending cash balance fall below $30,000 (to ensure continued business operations, the Court ruled that the Debtor must have an ending monthly cash balance of at least $30,000). However, absent further Court order, any reduction must not exceed the aggregate amount of prior additional adequate protection payments paid to Parkway. d. the Debtor pay its counsel Goldstein & McClintock LLLP the professional fee line-item in the budget (including for prior months), which amount will be held in the firm's client trust account pending Court approval of fees and expenses application. The Court ruled that, no later than two weeks prior to the expiration of the current budget on August 31, 2020, the Debtor must file an extension of the budget and the Debtor will be authorized to use cash collateral under said extended budget pursuant to the terms of this order. A copy of the interim order is available free of charge at https://is.gd/1DBsNv from PacerMonitor.com. About Catherine Courts Condominium Catherine Courts Condominium, LLC and Catherine Courts Management, Inc. are privately held companies whose principal assets are located at 8503 W. Catherine Ave., Chicago, Ill. Catherine Courts Condominium and Catherine Courts Management sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Lead Case No. 19-29822) on Oct. 20, 2019. The petitions were signed by Guido C. Neri, member and authorized representative. At the time of the filing, Catherine Courts Condominium disclosed assets and liabilities of less than $50 million, while Catherine Courts Management disclosed assets and liabilities of less than $50,000. The Hon. Timothy A. Barnes is the case judge. Amrit S. Kapai, Esq. at Goldstein & McClintock LLLP, is the Debtors' counsel. CCC INFORMATION: Moody's Affirms B3 CFR, Outlook Stable ------------------------------------------------------- Moody's Investors Service affirmed CCC Information Services Inc.'s B3 corporate family rating and B3-PD Probability of Default Rating, and downgraded its first-lien senior secured instrument rating from B2 to B3. Moody's also affirmed CCC's second-lien senior secured Caa2 rating. The outlook remains stable. These rating actions follow the company's announcement in February 2020 that it will issue an incremental $250 million first-lien term loan, as an add-on to the current facility. All the proceeds will be used to repay the existing second-lien term loan, which will be reduced from $375 million to $125 million. The proposed $250 million incremental first-lien term loan and proportional reduction in subordinated debt reduce the loss cushion provided by the second-lien debt in the event of a default, resulting in the first-lien instrument rating downgrade from B2 to B3. Downgrades: Issuer: CCC Information Services Inc. Senior Secured 1st Lien Bank Credit Facility, Downgraded to B3 (LGD3) from B2 (LGD3) Assignments: Issuer: CCC Information Services Inc. Senior Secured 1st Lien Bank Credit Facility, Assigned B3 (LGD3) Outlook Actions: Issuer: CCC Information Services Inc. Outlook, Remains Stable Affirmations: Issuer: CCC Information Services Inc. Probability of Default Rating, Affirmed B3-PD Corporate Family Rating, Affirmed B3 Senior Secured 2nd Lien Bank Credit Facility, Affirmed Caa2 (LGD6 from LGD5) RATINGS RATIONALE CCC's B3 corporate family rating is constrained by its very high debt to EBITDA leverage at roughly 8x (Moody's adjusted) as of September 2019. The company's concentrated revenue base and relatively small scale, with $605 million of revenue as of September 2019, also weigh on the rating. Almost all of CCC's revenues are generated in the US and the top 10 customers comprise roughly 43% of revenue. The company is building its presence in China and investing in new offerings beyond core auto physical damage solutions, such as casualty solutions, auto parts networks, telematics and other. However, the majority (76%) of revenue is generated by APD services in the US, which creates a concentrated revenue base compared to peers. The burden of servicing high levels of LBO debt may somewhat hamper CCC's ability to continue to invest in new products and platform modernization, which are key to compete in a sector that has benefited from the explosive growth of digitized information. Ratings are supported by CCC's leading APD market position in the US and its predictable revenue base with high retention rates and healthy margins. CCC's solutions are embedded in client workflows, creating high switching costs and barriers to entry. In addition, CCC's proprietary claim database with over 30 years of repair history provides a competitive advantage. The stable outlook reflects Moody's expectation for high single-digit revenue growth over the next 12 to 18 months, driven by increased claim volumes, new customer wins and upselling across the current customer base. Moody's expects EBITDA margins will remain mostly flat around 30% (Moody's adjusted), as the benefits of a growing scale are partially offset by investments in the casualty platform, telematics and other growth initiatives. Moody's expects leverage will continue to slowly moderate over the next 12-18 months towards 7x, which is more appropriate for the B3 rating. The ratings for the individual debt instruments incorporate CCC's overall probability of default, reflected in the B3-PD, and the loss given default assessments for individual instruments. The pro forma first-lien credit facilities, consisting of the $100 million revolver maturing 2022 and 2023, and a $1.28 billion term loan due 2024, are rated B3 with a loss given default assessment of LGD3. CCC's pro forma $125 million second-lien term loan, due 2025, is rated Caa2, with a loss given default assessment of LGD6. The two-notch differential to the B3 CFR reflects the pro forma proportion of second-lien debt and first-lien debt in the capital structure. CCC's liquidity is very good, supported by the $88 million balance in cash and cash equivalents and full capacity under its committed $100 million revolver as of September 2019. Moody's expects the company to generate free cash flow to debt between 3%-5% (Moody's adjusted assuming no dividends) over the next 12 months, supported by lower pro forma interest expense and top line growth. Amortization on CCC's first-lien term loan is 1% annually ($12.5 million). The revolving credit agreement has a springing net first-lien leverage maximum of 8.3x, tested only when at least 35% of the facility has been drawn. While the test wasn't applicable as of September 2019 because the revolver remained undrawn, Moody's does not expect the company will have difficulty staying within the covenant threshold. The ratings could be upgraded if improving financial performance, combined with meaningful debt reduction and balanced financial policies, result in debt to EBITDA approaching 5.5x and free cash flow to debt exceeding 5% on a sustained basis (all metrics Moody's adjusted). The ratings could be downgraded if revenue growth or profitability decline materially. A leveraging debt-financed acquisition or tightening of liquidity could also pressure the ratings, particularly if free cash flow to debt approaches break-even or Moody's expects debt to EBITDA will remain above 8x on a sustained basis (all metrics Moody's adjusted). The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. CCC Information Services Inc.'s core APD and repair segment (approximately 76% or revenues) provides software and services that enable auto insurance companies and collision repair facilities to manage the automobile claim process. CCC's casualty segment (approximately 20% of revenues) provides auto injury medical solutions to insurance carriers. The smaller emerging "new business" segment (less than 5% of revenues) comprises various growth initiatives including telematics and parts solutions, which are sold to insurers, auto dealers, OEMs, multi-shop operators, and body shops. This segment also includes an incipient presence in China. Moody's expects the company will generate revenue above $650 million in 2020. Private equity firm Advent International acquired CCC in April 2017. CCS MEDICAL: Wins 50th Interim Order to Use Cash Collateral ----------------------------------------------------------- Judge Michael J. Kaplan authorized CCS Medical PLLC to use cash collateral to pay To Results Through Collaboration LLC (Almarie Falbo) $875 for miscellaneous services. The Court ruled that Bank of America, N.A., the United States and all creditors holding liens on or claims against the cash collateral or rights of set-offs, are granted roll-over or replacement liens or rights of set-offs as security to the same extent, in the same priority and with respect to the same assets that served as collateral for the pre-petition debts, to the extent of cash collateral actually used. The pre-petition secured creditors will have an administrative claim under Section 507(b) of the Bankruptcy Code with priority over other expenses of administration under Section 507(a)(2) to the extent the replacement liens fail to compensate for the use of the cash collateral. A copy of the 50th interim order is available free of charge at https://is.gd/ZdLwfj from PacerMonitor.com. Hearing on the motion is continued to February 19, 2020 at 11 a.m. About CCS Medical PLLC Headquartered in Orchard Park, New York, CCS Medical PLLC is a provider of primary care and specialty medicine services currently operating at Orchard Park, Delaware Avenue, and Youngs. CCS Medical PLLC is an affiliate of Comprehensive Cancer Services Oncology, P.C., doing business as CCS Oncology, doing business as CCS Healthcare, which, along with its affiliates, sought Chapter 11 protection (Bankr. W.D.N.Y. Lead Case No. 18-10598) on April 2, 2018. Judge Michael J. Kaplan is the case judge. Arthur G. Baumeister, Jr., Esq., of Baumeister Denz LLP, serves as the Debtors' counsel. Mark Schlant has been named the Chapter 11 trustee. Joseph J. Tomaino of Grassi Healthcare Advisors LLC has been appointed patient care ombudsman. CERIDIAN HCM: S&P Upgrades ICR to 'B+' on Improved Credit Measures ------------------------------------------------------------------ S&P Global Ratings raised its long-term issuer credit rating on Minneapolis-based human capital management (HCM) services provider Ceridian HCM Holding Inc. to 'B+' from 'B'. At the same time, S&P raised its issue-level rating on the company's senior secured bank debt to 'B+' from 'B'. The recovery rating on the debt is unchanged at '3'. Strong cloud revenue growth and maturing cloud customer base support EBITDA visibility while allowing Ceridian to reinvest in its growth. The upgrade primarily reflects S&P's expectation of improved credit measures with S&P Global Ratings' adjusted debt-to-EBITDA of about 4.5x over the next 12 months spurred by the company's strong topline growth. S&P anticipates Ceridian will expand its market share in the HCM market organically through its Dayforce cloud service by adding new customers and upselling to the existing customer base. At the same time, the company's strong cloud customer retention rates (about 95%) and maturing customer base should support healthy underlying recurring EBITDA generation over the next 12 months. S&P expects Ceridian will deploy a portion of its EBITDA to developing new products and expanding into new geographic markets as well as into the North American enterprise segment where it has less exposure. The stable outlook on Ceridian reflects S&P Global Ratings' expectation that the company will be able to execute its organic growth strategy of expanding both its market share and profitable customer base such that adjusted debt-to-EBITDA will improve close to 4.5x over the next 12 months. In S&P's view, the company's strong growth from its cloud-based products and maturing cloud customer base should be sufficient to mitigate lower float income and investments targeted for 2020. "We could raise the rating over the next 12 months if the company's adjusted debt-to-EBITDA improves, and we believe that it can be sustained below 4x along with adjusted FOCF-to-debt approaching 10%. In this scenario, we would expect Ceridian to exhibit sustainable cash flow growth in the double-digit area from its cloud-based products and increase scale by adding more customers and upselling new products. At the same time, we would also expect the company to demonstrate a commitment to a conservative financial policy such that adjusted debt-to-EBITDA remains below 4x," S&P said. "We could lower the rating in the next 12 months if Ceridian's adjusted debt-to-EBITDA increases above 5x or adjusted FOCF to debt approaches 2%. In our opinion, this scenario could occur if the company adopts an aggressive growth strategy for its cloud-based HCM offerings, which pressures near-term profitability, while its legacy offerings suffer steep erosion. Alternatively, we could lower the rating if the company performs a debt-funded shareholder remuneration or acquisition leading to adjusted debt-to-EBITDA remaining above 5x for a prolonged period," the rating agency said. COCHRAN & PEASE: Unsecureds Owed $1.05M to Split $20K in Plan ------------------------------------------------------------- Debtor Cochran & Pease, LLC d/b/a Terri filed with the U.S. Bankruptcy Court for the Southern District of New York a Plan of Liquidation and a Disclosure Statement. As to Timberland Bank's Secured Claim in Class 1, no later than July 31, 2020, the Debtor will pay $20,000 to Timberland Bank in full satisfaction of its Class 1 Allowed Secured Claim. The balance of Timberland Bank's Claim of approximately $438,000.00shall be treated as a Class 2Unsecured Claim. Class 2 consists of the holders of General Unsecured Claims which includes all claims, such as ordinary trade creditors. It also includes Amex's Claim because Amex's lien is junior to Timberland's lien on the Debtor's personal property. The Debtor estimates the total amount of Allowed Unsecured Claims will be approximately $1,050,000 based upon the filed claims as well as scheduled claims. The Plan provides for a pro rata distribution of $20,000 to Holders of Allowed Class 2 Claims in full settlement and satisfaction of their Claims paid no later than July 31, 2020. This equates to an approximate 2 percent distribution to holders to Allowed Class 2 Claims. On the Effective Date of the Plan, all equity interest holders in Class 3 will have their Equity Interest in the Debtor terminated and canceled. Class 3 equity interest holders will receive no Distribution or monetary payment on account of their equity interest in the Debtor. According to the Debtor's monthly operating reports, from the Filing Date through Dec. 31, 2019, the Debtor generated gross revenues of approximately $1,563,000 which has resulted in an operating profit exclusive of depreciation in the sum of approximately $50,000. Because the Debtor is a small business Debtor, the operating reports are prepared more on a cash basis so the actual profit on an accrual basis may be different. The Debtor has paid of all its postpetition obligations in a timely fashion and has paid the adequate protection payment of $8,500 per month to Timberland and Amex. This Plan is currently based upon the assumption the Debtor will be unable to continue operating from the 23rd Street Property and will be unable to secure a new location. As such, the Plan will be funded from the liquidation of the Debtor’s assets which consist of used restaurant machinery and equipment as well as a 2014 Isuzu refrigerated box truck. The Plan will also be funded by cash on hand in the Debtor's in possession bank account at the time the restaurant closes. Unless the 23rd Street Property landlord agrees otherwise, it is expected the Debtor will cease operations at the 23rd Street Property in June or July of 2020. In the event the Debtor is successful in securing a new location and can continue to operate, the Debtor will likely file an amended Plan. A full-text copy of the Disclosure Statement dated Jan. 21, 2020, is available at https://tinyurl.com/rvupjuc from PacerMonitor.com at no charge. The Debtor is represented by: TARTER KRINSKY & DROGIN LLP Scott S. Markowitz, Esq. 1350 Broadway, 11th Floor New York, New York 10018 Tel: (212) 216-8000 E-mail: smarkowitz@tarterkrinsky.com About Cochran & Pease Cochran & Pease, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 19-10903) on March 27, 2019. In the petition signed by its president, Michael Pease, the Debtor was estimated to have assets of less than $500,000 and debt of less than $1 million. The case is assigned to Judge James L. Garrity Jr. Tarter Krinsky & Drogin LLP is the Debtor's counsel. COMMERCIAL BARGE LINE: S&P Cuts ICR to 'D' on Bankruptcy Filing --------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Commercial Barge Line Co. to 'D' from 'CC'. At the same time, S&P lowered its issue-level rating on the company's senior secured term loan to 'D' from 'C'. The downgrade follows the prepackaged Chapter 11 bankruptcy filing of American Commercial Lines Inc., the parent of Commercial Barge Line, in the bankruptcy court for the Southern District of Texas. Earlier this week, the company entered into a restructuring support agreement with a substantial majority of its debtholders, under which it expects to reduce its funded debt by approximately $1 billion. COMMERCIAL BARGE: Moody's Cuts CFR to Ca & Alters Outlook to Stable ------------------------------------------------------------------- Moody's Investors Service downgraded all ratings of Commercial Barge Line Company, including the senior secured term loan to C from Caa3, the Probability of Default Rating to D-PD from Caa2-PD, and the Corporate Family Rating to Ca from Caa2. The rating outlook was also changed to stable from negative. These actions follow the company's commencement of Chapter 11 bankruptcy proceedings filed in the United States Bankruptcy Court for the Southern District of Texas on February 7, 2020. Moody's will withdraw all of CBLC's ratings following the rating action. Downgrades: Issuer: Commercial Barge Line Company Probability of Default Rating, Downgraded to D-PD from Caa2-PD Corporate Family Rating, Downgraded to Ca from Caa2 Senior Secured Term Loan, Downgraded to C (LGD5) from Caa3 (LGD4) Outlook Actions: Issuer: Commercial Barge Line Company Outlook, changed to Stable from Negative RATINGS RATIONALE The ratings, including the senior secured debt rating at C, reflect Moody's view of an expected family recovery of approximately 30%. The company plans to continue operating while it restructures under Chapter 11 bankruptcy protection, aided by a pre-packaged arrangement with its lenders that (if court-approved) it expects to reduce existing debt by about $1 billion. Funded debt approximated $1.44 billion as of September 30, 2019, including about $950 million of the secured term loan and $495 million borrowed under the $640 million ABL revolving credit facility. The principal methodology used in these ratings was Shipping Industry published in December 2017. Commercial Barge Line Company is one of the largest integrated marine transportation and services companies in the United States, providing barge transportation services. The company is owned by affiliates of Platinum Equity, LLC. CBLC acquired AEP Resources, Inc. and its subsidiary AEP River Operations LLC (together "AEP") from American Electric Power Company, Inc. in November 2015. AEP focuses on the inland river transportation of bulk and liquid products. CBLC's revenues approximated $986 million for last twelve months ended September 30, 2019. COMPREHENSIVE CANCER: Obtains 50th Interim Approval to Use Cash --------------------------------------------------------------- Judge Michael J. Kaplan granted Comprehensive Cancer Services Oncology, P.C., interim access to cash collateral to pay To Results Through Collaboration LLC (Almarie Falbo) miscellaneous services amounting to $875. Pursuant to the interim order: (a) Bank of America, N.A., the United States and all creditors holding liens on or claims against the cash collateral or rights of set-offs, are granted roll-over or replacement liens or rights of set-offs as security to the same extent, in the same priority and with respect to the same assets that served as collateral for the pre-petition debts, to the extent of cash collateral actually used. (b) the pre-petition secured creditors will have an administrative claim under Section 507(b) of the Bankruptcy Code with priority over other expenses of administration under Section 507(a)(2), to the extent the replacement liens fail to compensate for the use of the cash collateral. A copy of the 50th interim order is available free of charge at https://is.gd/ZdLwfj from PacerMonitor.com. A hearing on the motion is continued to February 19, 2020 at 11 a.m. About CCS Oncology Comprehensive Cancer Services Oncology, P.C., doing business as CCS Oncology, doing business as CCS Healthcare, along with its affiliates, sought Chapter 11 protection (Bankr. W.D.N.Y. Lead Case No. 18-10598) on April 2, 2018. In the petitions signed by Won Sam Yi, president/CEO, CCS estimated at least $50,000 in assets and $10 million to $50 million in liabilities. CCS Oncology is a professional corporation operating a practice of medical and radiological oncology treatment, with offices in Orchard Park, Frankhauser, Niagra Falls, Kenmore, and Lockport. CSS Medical PLLC is a provider of primary care and specialty medicine services currently operating at Orchard Park, Delaware Avenue, and Youngs. CCS Oncology is the sole member of CCS Medical. CCS Equipment is the owner of certain medical equipment used in the medical practices and CCS Oncology is its sole member. CCS Billing was intended to be developed into a separate billing entity for the medical practices, but was never funded or operational. CCS Billing has no assets and has had no activity other than showing a couple of minimal historical accounting entries. WSEJ is the owner of certain real property used by the medical practices. The Debtors are headquartered in Orchard Park, New York. Judge Michael J. Kaplan is the case judge. Arthur G. Baumeister, Jr., Esq., of Baumeister Denz LLP, serves as the Debtors' counsel. Mark Schlant has been named the Chapter 11 trustee. Joseph J. Tomaino of Grassi Healthcare Advisors LLC has been appointed patient care ombudsman. DBMP LLC: Appointment of Asbestos Claimants' Committee Sought ------------------------------------------------------------- Shelley Abel, the U.S. Bankruptcy Administrator for the Western District of North Carolina, filed a motion to appoint a committee to represent DBMP LLC's asbestos claimants. In her motion, the bankruptcy administrator asked the U.S. Bankruptcy for the Western District of North Carolina to issue an order appointing these persons to serve on the committee: (1) Theresa V. Germont c/o Cohen, Placitella & Roth, P.C. Attn: Christopher M. Placitella 127 Maple Avenue Red Bank, NJ 07701 (2) Robin S. Wierenga c/o Cooney & Conway Attn: John D. Cooney 120 N. LaSalle Street, Suite 3000 Chicago, IL 60602 (3) Earl F. Powell c/o Goldberg Persky White, P.C. Attn: Bruce E. Mattock 11 Stanwix Street, Suite 1800 Pittsburgh, PA 15222 (4) Patsy Diehl Special Administrator of Carl Diehl c/o The Gori Law Firm Attn: Sara Salger 156 North Main Street Edwardsville, IL 62025 (5) Cindy Burch c/o Kazan, McClain, Satterly & Greenwood PLC Attn: Steven Kazan 55 Harrison Street, Suite 400 Oakland, CA 94607 (6) Kurt Henningsen c/o Law Offices of Peter G. Angelos, P.C. Attn: Armand J. Volta, Jr. 100 N. Charles Street, 22nd Floor Baltimore, MD 21201 (7) Jimmy Reich c/o Maune Raichle Hartley French & Mudd, LLC Attn: Marcus E. Raichle, Jr./Chris McKean 1015 Locust St., Ste. 1200 St. Louis, MO 63101 (8) James Hunt c/o Shepard Law Attn: Michael Shepard 160 Federal Street Boston, MA 02110 (9) Francisco Galaviz c/o Shrader & Associates, L.L.P. Attn: Robert E. Shuttlesworth 9 Greenway Plaza, Suite 390 Houston, TX 77046 (10) Michael Nuzzolese c/o Weitz & Luxenberg, P.C. Attn: Lisa Busch 700 Broadway New York, NY 10003 Ms. Abel said she has solicited asbestos claimants regarding their interest to serve on the committee and has received over 20 responses. In the same filing, the bankruptcy administrator asked the court to deny DBMP's motion to appoint the ad hoc committee of asbestos personal injury claimants as the official committee in the company's Chapter 11 case. Asbestos claimants including the Estate of Ignacio Galaviz, Ron Maxum, Brenda Reimel, Wendy Roberts and a group represented by Kazan, McClain, Satterley & Greenwood also opposed DBMP's motion, saying it seeks to eliminate the objective process by which official committees are formed and that the ad hoc committee is not qualified as it lacks "special experience or expertise." Ignacio Galaviz is represented by: Heather Culp, Esq. John C. Woodman, Esq. Essex Richards, P.A. 1701 South Boulevard Charlotte, N.C. 28203 Tel: (704) 377-4300 Fax: (704) 372-1357 Email: jwoodman@essexrichards.com -- and -- Robert E. Shuttlesworth, Esq. Shrader & Associates, LLP 9 Greenway Plaza, Suite 390 Houston, TX 77046 Tel: 713-782-0000 Fax: 713-571-9605 Email: robert@shraderlaw.com Ron Maxum is represented by: Heather Culp, Esq. John C. Woodman, Esq. Essex Richards, P.A. 1701 South Boulevard Charlotte, N.C. 28203 Tel: (704) 377-4300 Fax: (704) 372-1357 Email: jwoodman@essexrichards.com Brenda Reimel is represented by: Heather Culp, Esq. John C. Woodman, Esq. Essex Richards, P.A. 1701 South Boulevard Charlotte, N.C. 28203 Tel: (704) 377-4300 Fax: (704) 372-1357 Email: jwoodman@essexrichards.com -- and -- James B.Smith, Esq. Dean Omar Branham + Shirley, LLP 302 North Market Street, Suite 300 Dallas, TX 75202 Phone: 214-722-5990 Email: bsmith@dobslegal.com Wendy Roberts is represented by: Heather Culp, Esq. John C. Woodman, Esq. Essex Richards, P.A. 1701 South Boulevard Charlotte, N.C. 28203 Tel: (704) 377-4300 Fax: (704) 372-1357 Email: jwoodman@essexrichards.com -- and -- Lauren E. Williams, Esq. SWMW Law, LLC 701 Market Street, Suite 1000 St. Louis, Missouri 63101 Phone: 314-651-5241 Email: Lauren@swmwlaw.com Linda Simpson, Esq., at JD Thompson Law, is the attorney for the asbestos claimants represented by Kazan McClain. The attorney maintains an office at: Linda W. Simpson, Esq. JD Thompson Law P.O. Box 33127 Charlotte, NC 28233 Telephone: (704) 641-4359 Facsimile: (704) 943-1152 Email: LWS@JDThompsonLaw.com About DBMP LLC DBMP LLC is a North Carolina limited liability company and the direct parent company of Millwork & Panel LLC, which manufactures vinyl siding and polyvinyl chloride (PVC) trim products for the construction market at facilities it owns in Claremont, N.C. and Social Circle, Ga. It is a defendant in tens of thousands of asbestos-related lawsuits pending in courts throughout the United States. DBMP sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D.N.C. Case No. 20-30080) on Jan. 23, 2020. At the time of the filing, the Debtor disclosed assets of between $500 million and $1 billion and liabilities of the same range. Judge Laura T. Beyer oversees the case. The Debtor tapped Jones Day as legal counsel; Robinson, Bradshaw & Hinson, P.A. and Schiff Hardin LLP as special counsel; Bates White, LLC as consultant; and Epiq Corporate Restructuring, LLC as claims, noticing and balloting agent. DIRECTVIEW HOLDINGS: Appoints Chief Financial Officer ----------------------------------------------------- The Board of Directors of Directview Holdings, Inc., appointed Steven M. Plumb to the role of chief financial officer, effective Feb. 3, 2020. Mr. Plumb will perform the services and duties that are normally and customarily associated with the chief financial officer position, as well as other duties as the Board reasonably determines. Steven M. Plumb CPA, 60, has been the chief financial officer of CorVitals of Texas, Inc., a private medical device company, since December 2018. He has served as the chief financial officer of Yippy, Inc. (YIPI) from January 2010 to present. From May 2013 through February 2019, Mr. Plumb was the chief financial officer of ProBility Media Corp. Prior to serving in such executive roles, Mr. Sullivan held executive, auditor, directorship, consulting and/or ownership positions at Bering Exploration, Inc., Complexa, Inc., ADB International Group, Inc., Galaxy Media & Marketing Corp, Oncolin Therapeutics, Inc., Striker Oil & Gas, Inc, HoustonPharma, Inc., Hyperdynamics Corp., ADVENTRX Pharmaceuticals, Inc., Clear Financial Solutions, Inc., PriceWaterhouseCoopers and KPMG. Mr. Plumb has a Bachelor of Business Administration degree from the University of Texas at Austin, Austin, Texas. Director Appointments The board of directors of Directview appointed Emmit J. McHenry as a member of the Board, effective Feb. 3, 2020. Mr. McHenry will hold office until his successor is elected and qualified or until he is removed from office in accordance with the Company's bylaws. It has not been determined whether Mr. McHenry will be named to any Board committees. Mr. McHenry and the Company entered into an invitation letter, dated Feb. 3, 2020, in connection with Mr. McHenry's appointment. Pursuant to the terms of the McHenry Invitation Letter, Mr. McHenry agreed to make himself available on an as-needed basis for Board meetings by conference call, to execute written consents, and for such other related matters as the Company may reasonably request. The Company and Mr. McHenry agreed to discuss compensation for Board service at a future date. In addition, the Board appointed Judith Muhlberg as a member of the Board, effective Feb. 3, 2020. Ms. Muhlberg will hold office until her successor is elected and qualified or until she is removed from office in accordance with the Company's bylaws. It has not been determined whether Ms. Muhlberg will be named to any Board committees. Ms. Muhlberg and the Company entered into an invitation letter, dated Feb. 3, 2020, in connection with Ms. Muhlberg's appointment. Pursuant to the terms of the Muhlberg Invitation Letter, Ms. Muhlberg agreed to make herself available on an as-needed basis for Board meetings by conference call, to execute written consents, and for such other related matters as the Company may reasonably request. The Company and Ms. Muhlberg agreed to discuss compensation for Board service at a future date. About Directview Holdings DirectView Holdings, Inc., (DIRV) together with its subsidiaries, provides video surveillance solutions and teleconferencing products and services to businesses and organizations. Based in Boca Raton, Florida, the company operates in two divisions, Security (Video Surveillance) and Video Conferencing. The Security division offers technologies in surveillance systems providing onsite and remote video and audio surveillance, digital video recording, and services. It also sells and installs surveillance systems; and sells maintenance agreements. The company sells its products and services in the United States and internationally through direct sales force, referrals, and its websites. The Video Conferencing division offers teleconferencing products and services that enable clients to conduct remote meetings by linking participants in geographically dispersed locations. It is involved in the sale of conferencing services based upon usage, the sale and installation of video equipment, and the sale of maintenance agreements. This division primarily provides conferencing products and services to numerous organizations ranging from law firms, banks, high tech companies and government organizations. DirectView Holdings maintains two websites at http://www.directview.com/and http://www.directviewsecurity.com Directview reported a net loss of $10.05 million for the year ended Dec. 31, 2018, compared to a net loss of $1.54 million for the year ended Dec. 31, 2017. As of Sept. 30, 2019, DirectView Holdings had $2.70 million in total assets, $33.72 million in total liabilities, and a total stockholders' deficit of $31.01 million. Assurance Dimensions, the Company's auditor since 2017, issued a "going concern" qualification in its report dated April 12, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, stating that the Company had a net loss and cash used from operations of approximately $10,058,000 and $1,854,000, respectively for the year ended of Dec. 31, 2018 and a working capital deficit of approximately $21,351,000 as of Dec. 31, 2018. These conditions raise substantial doubt about the Company's ability to continue as a going concern. DIRECTVIEW HOLDINGS: Signs Consulting Deal with Vine Advisors ------------------------------------------------------------- The Board of Directors of DirectView Holdings, Inc., approved a consulting agreement, dated Jan. 1, 2020 between the Company and Vine Advisors LLP where the Company retained Vine to provide CFO advisory, outsourced accounting, and financial reporting services. In connection with the Consulting Agreement, Vine agreed to participate in the management of the Company with Steven M. Plumb servicing as chief financial officer in consideration for the Company's agreement to pay Vine for the professional services rendered under the Agreement based on Vine's standard firm billing rates. The term of the Consulting Agreement is three months. Unless canceled by either party by written notice 10 days prior to the end of any term of the Agreement, the Agreement will automatically renew for successive three month periods. About Directview Holdings DirectView Holdings, Inc., (DIRV) together with its subsidiaries, provides video surveillance solutions and teleconferencing products and services to businesses and organizations. Based in Boca Raton, Florida, the company operates in two divisions, Security (Video Surveillance) and Video Conferencing. The Security division offers technologies in surveillance systems providing onsite and remote video and audio surveillance, digital video recording, and services. It also sells and installs surveillance systems; and sells maintenance agreements. The company sells its products and services in the United States and internationally through direct sales force, referrals, and its websites. The Video Conferencing division offers teleconferencing products and services that enable clients to conduct remote meetings by linking participants in geographically dispersed locations. It is involved in the sale of conferencing services based upon usage, the sale and installation of video equipment, and the sale of maintenance agreements. This division primarily provides conferencing products and services to numerous organizations ranging from law firms, banks, high tech companies and government organizations. DirectView Holdings maintains two websites at http://www.directview.com/and http://www.directviewsecurity.com Directview reported a net loss of $10.05 million for the year ended Dec. 31, 2018, compared to a net loss of $1.54 million for the year ended Dec. 31, 2017. As of Sept. 30, 2019, DirectView Holdings had $2.70 million in total assets, $33.72 million in total liabilities, and a total stockholders' deficit of $31.01 million. Assurance Dimensions, the Company's auditor since 2017, issued a "going concern" qualification in its report dated April 12, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, stating that the Company had a net loss and cash used from operations of approximately $10,058,000 and $1,854,000, respectively for the year ended of Dec. 31, 2018 and a working capital deficit of approximately $21,351,000 as of Dec. 31, 2018. These conditions raise substantial doubt about the Company's ability to continue as a going concern. DO@KING PLOW ARTS: U.S. Trustee Unable to Appoint Committee ----------------------------------------------------------- The Office of the U.S. Trustee on Feb. 5, 2020, disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of DO@King Plow Arts Center, LLC. About DO@King Plow Arts Center DO@King Plow Arts Center LLC is a commercial, performing and visual arts center in Atlanta. DO@King Plow Arts Center sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 20-60066) on Jan. 2, 2020. In the petition signed by Nacasha Leca Ruffin, authorized representative, the Debtor was estimated to have $1 million to $10 million in both assets and liabilities. Judge Jeffery W. Cavender oversees the case. William A. Rountree, Esq. at Rountree Leitman & Klein, LLC, is the Debtor's legal counsel. DORIAN LPG: SEACOR Holdings Reports 0% Equity Stake --------------------------------------------------- SEACOR Holdings Inc. disclosed in an amended Schedule 13G filed with the Securities and Exchange Commission that as of Dec. 31, 2019, it beneficially owns zero shares of common stock of Dorian LPG Ltd. A full-text copy of the regulatory filing is available for free at the SEC's website at: https://is.gd/bKNK5G About Dorian LPG Stamford, Connecticut-based Dorian LPG Ltd. -- http://www.dorianlpg.com/-- is a liquefied petroleum gas shipping company and an owner and operator of modern very large gas carriers. Dorian LPG's fleet currently consists of twenty-three modern VLGCs. Dorian LPG has offices in Stamford, Connecticut, USA; London, United Kingdom; Copenhagen, Denmark; and Athens, Greece. Dorian LPG reported a net loss of $50.94 million for the year ended March 31, 2019, a net loss of $20.40 million for the year ended March 31, 2018, and a net loss of $1.44 million for the year ended March 31, 2017. As of Dec. 31, 2019, the Company had $1.65 billion in total assets, $675.81 million in total liabilities, and $982.02 million in total shareholders' equity. DPW HOLDINGS: Enters Into Exchange Agreement for $7.7M Debt ----------------------------------------------------------- DPW Holdings, Inc., has entered into a Master Exchange Agreement dated Feb. 10, 2020 with a family office to resolve debt previously in default in an aggregate amount of up to $7.7 million. The family office has purchased $4.2 million of outstanding debt currently in default and has committed to purchase up to an additional $3.5 million of outstanding debt upon receipt of stockholder approval. In connection with the entry into the Agreement, Dominion Capital, LLC has sold its secured promissory note to the family office, as has another creditor, which notes in the hands of the family office are no longer in default, and resolved all litigation between the parties. The remaining note holders have entered into forbearance agreements and, upon receipt of stockholder approval, the family office has agreed to acquire the debt held by these parties. DPW's CEO and Chairman, Milton "Todd" Ault, III said, "Today's announcement represents a significant milestone for DPW. As a significant stockholder, I am now much more confident in the Company's future as much uncertainty has been removed. Our supportive partners worked diligently with us to structure these transactions, and I am proud of our team's persistence in getting this transaction consummated. We are pleased to report that as a result of the closing of the exchange agreement, litigation related to our senior secured creditor has been dropped. The exchange agreement has not only eliminated debt that was in default, but will improve our financial results by reducing the Company's borrowing costs and will also enable management to focus on the many opportunities we have to grow our business, which was challenging in light of the constraints under our prior debt agreements." The first exchange of debt for equity shall occur on the date of the Agreement. Some of the benefits of the Agreement include: * Elimination of the majority of all outstanding debt, subject to stockholder and regulatory approval; * The full repayment to Dominion of its senior secured note, and the termination of its actions against DPW; and * The other lenders having agreed to forbear taking further actions as the Company seeks stockholder and regulatory approval to issue additional shares as part of the Agreement to eliminate all of the remaining debt in default. According to the Agreement the family office may exchange debt into a maximum of 19.9% of the outstanding shares of common stock prior to stockholder approval. About DPW Holdings Headquartered in Newport Beach, California, DPW Holdings, Inc., formerly known as Digital Power Corp. -- http://www.DPWHoldings.com/-- is a diversified holding company pursuing growth by acquiring undervalued businesses and disruptive technologies that hold global potential. Through its wholly owned subsidiaries and strategic investments, the Company provides mission-critical products that support a diverse range of industries, including defense/ aerospace, industrial, telecommunications, medical, crypto-mining, and textiles. In addition, the company owns a select portfolio of commercial hospitality properties and extends credit to select entrepreneurial businesses through a licensed lending subsidiary. DPW Holdings incurred a net loss of $32.98 million in 2018, following a net loss of $10.89 million in 2017. As of Sept. 30, 2019, the Company had $47.42 million in total assets, $29.50 million in total liabilities, and $17.92 million in total stockholders' equity. Marcum LLP, in New York, the Company's auditor since 2016, issued a "going concern" qualification in its report dated April 16, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, stating that the Company has a significant working capital deficiency, has incurred significant losses, and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. ENCINO ACQUISITION: Fitch Affirms B+ LT IDR & Alters Outlook to Neg ------------------------------------------------------------------- Fitch Ratings affirmed the Long-Term Issuer Default Rating for Encino Acquisition Partners Holdings, LLC and Encino Acquisition Partners, LLC at 'B+'. The Rating Outlook has been revised to Negative from Stable. Fitch has also affirmed the 'BB-'/'RR3' rating of the company's senior secured second lien term loan. Encino's IDR reflects the company's sizable Utica position that will allow for years of development, competitive unit economics, the ability to effectively transport gas out of basin to advantaged price points, expected leverage between 2.0x-2.5x and strong hedge profile. These considerations are offset by the company's lack of historical operations of the Utica position, heightened potential for margin compression given its exposure to natural gas supply-demand fundamentals, and relatively high firm transportation costs. The Negative Outlook reflects Fitch's view that further credit improvement will be challenged in the current natural gas pricing environment and as reflected in Fitch's natural gas price deck. Leverage sensitivities could be breached and liquidity reduced if natural gas prices remain low over an extended period of time. KEY RATING DRIVERS Lower Pricing Offset Production: Encino's production has increased over 25% since it acquired the Chesapeake Utica shale assets in third-quarter (3Q) 2018 and Fitch expects a further +20% increase in 2020 as the company maintains its two rig, two frac drilling program. Encino has also focused on drilling where the condensate mix is greater to boost overall realized pricing. Better than expected production growth, however, has been more than offset by lower natural gas and NGL pricing from plan, resulting in EBITDA and credit metrics coming in weaker than Fitch's original assumptions. Still, Encino's credit metrics remain within high single 'B' guidelines and a robust hedging strategy should provide for some protection in 2020. High Firm Transportation Costs: EAP inherited long-dated firm transportation agreements for natural gas takeaway, and has sufficient takeaway capacity for current volumes to areas that have had advantaged pricing versus in basin sales. However, Encino's firm transportation (FT) costs are among the highest of Fitch's monitored natural gas producers. Management is attempting to mitigate these costs through higher production and focus on higher price condensate drilling. Fitch is concerned that the need to meet FT commitments prevents the company from reducing capex and negates FCF generation. Adequate Liquidity Supports Credit: Although Fitch expects Encino to be slightly FCF negative in 2020, liquidity should be adequate even based on Strip pricing assumptions. There are no maturities until the revolver becomes due in 2023 and the drawdown on the revolver after 2021 is expected to be minimal. Sizable Utica Footprint: Encino acquired a large wet gas asset base in the Utica basin, with over 900,000 net acres, 300,000 of which the company considers to be core. The acreage is spread across the Utica shale, which provides optionality in drilling plans, allowing EAP to drill dry gas and wet gas wells depending on economics or pipeline commitments and constraints. Encino's production places it as the high-end range of 'BB' issuers, although the significant exposure to natural gas in the current lower pricing environment remains a hindrance. Seasoned Management, Credible Sponsor: While Encino is a newly formed company, Chesapeake Energy Corporation operated the assets for several years, and the Utica operations team from Chesapeake was moved to Encino. The management team consists of industry veterans with relatively deep U.S. onshore unconventional operational, as well as oil & gas financial, experience. Likewise the sponsor, Canada Pension Plan Investment Board (CPPIB), has a history of investing in oil and gas companies. Fitch views management's prior experience in the Appalachian Basin and CPPIB's material investment in Encino and their potential support as a positive. Favorable Hedging Policy: Fitch estimates that Encino has approximately 74% of expected production in 2020 hedged at $2.56 and 46% of expected 2021 production hedged at $2.54. The company also has hedges in place on condensate, ethane and propane. Encino intends to have a two to three year rolling hedging program, ultimately hedging up to 80% of total production. Fitch views the current plan of hedging favorably as it reduces cash flow volatility at favorable rates of return for the company. DERIVATION SUMMARY Encino Acquisition Partners Holdings, LLC's rating reflects the company's size, relatively low leverage, and favorable netbacks. EAP is smaller than other gas-oriented peers at approximately 822mmcfe/d produced compared with Southwestern Energy (BB/Negative) at almost 2,195mcfe/d of production, CNX Resources (BB/Stable) at 1,395mcfe/d, and Comstock Resources (B/Stable) at 1,095mcfe/d at Sept. 30, 2019. EAP's netback of $0.67/mcfe is below Comstock ($1.06/mcfe) and CNX ($0.80/mcfe), but above other Appalachia peers, including EQT (BBB-/Negative: $0.48/mcfe), Antero Resources (BB-/Negative; $0.33) and Southwestern ($0.21mcfe). Encino's gathering and transportation costs are among the highest of its peer group on a per unit basis, but this is partially offset by the high realized price it receives as its liquids mix at 31% is high relative to its peers. Fitch expects EAP to maintain leverage similar to gas-oriented peers (EQT, Antero, Southwestern, Comstock, CNX), all of which are at or below, or are expected by Fitch to be in the 2x-3x range over the near term. Fitch views the target of at or below 2.0x as achievable over the longer term. FCF is expected to be neutral turning slightly positive in 2021 for EAP under Fitch Henry Hub price deck assumptions of $2.50/mcf. KEY ASSUMPTIONS Fitch's Key Assumptions Within the Rating Case for the Issuer - Base case oil price deck of $57.50/bbl in 2020 and $55/bbl thereafter; - Base case Henry Hub natural gas price deck of $2.50/mcf from 2020 and thereafter; - Production increase to about 997mmcfe/d in 2020, followed by low single-digit growth thereafter; - Capex of $400 million in 2020 and thereafter; - Oil will become a larger portion of the mix over the forecasted period; - FCF in 2021 is used to reduce revolver borrowings. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - Increased size and scale to around 900mmcfe/d or an increase in higher margin liquids production; - Demonstrated commitment to management's capital allocation priorities to grow within pipeline capacity and cash flows with FCF used to pay down revolver borrowings; - Maintenance of mid-cycle debt/EBITDA at or below 2.0x; - FFO-adjusted Leverage at or below 2.0x. Developments That May, Individually or Collectively, Lead to Negative Rating Action - Loss of operational momentum resulting in production declines below 600mmcfe/d; - Increase in debt/EBITDA above 2.5x; - Sustained period of negative FCF outside of planned growth phase; - Reduction in economic drilling locations due to lower prices or asset quality; - FFO-adjusted Leverage above 2.5x. LIQUIDITY AND DEBT STRUCTURE Liquidity Could Tighten: Encino has a $2 billion reserved-based credit facility due 2023 with approximately $370 million drawn as of September 2019. The company's $1.05 billion borrowing base was re-affirmed in November 2019. Given Fitch's assumptions for capital spending plans combined with its Henry Hub natural gas price deck, Fitch estimates the company will turn slightly FCF positive in 2021 under its base case price scenario, which is expected to be used to reduce revolver borrowings. A continuation of lower natural gas prices could lead to a lower redetermination of its borrowing base. The revolver matures in September 2023 while the second lien term loan matures in September 2025. Fitch will monitor Encino's ability to repay the revolver over the next two years so that the company can successfully extend the maturity of that facility. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of 3 - ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. ENGINE HOLDING: S&P Downgrades ICR to 'CCC-'; Outlook Negative -------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S.-based advertising agency Engine Holding LLC to 'CCC-' from 'CCC'. The outlook is negative. At the same time, S&P lowered its issue-level ratings on Engine's senior secured first-lien credit facility to 'CCC-' from 'CCC+' and on the company's senior secured second-lien loan to 'CC' from 'CCC-'. S&P believes a payment default, distressed exchange, or restructuring is likely within the next 6 months. Engine Holding LLC has suffered from continued weak operating and financial performance, which has nearly depleted its liquidity sources including its revolver, cash balances, and recent cash contributions from its financial sponsor. The company has found it difficult to implement its turnaround strategy over the past year, and as a result its revenues have continued to decline and its profitability has remained poor. Over the past 12 months the company has depended on its minimal available cash and almost fully drawn revolver to service its significant annual debt costs; roughly $20 million in interest payments and $8 million in term loan amortization. S&P believes the company's internally generated cash flows may be insufficient to service these costs over the next couple of quarters, which could lead to a payment default or in or out of court restructuring. The negative outlook reflects the risk that the company could default on its debt obligations or pursue in or out of court restructuring without unforeseen positive developments. S&P could lower the rating if the company defaults on its debt obligations or if it pursues in or out of court restructuring. S&P could raise the rating if revenue, EBITDA, and cash flow improve, leading it to believe that there is no likelihood of a payment default or covenant violations within the next six months. This scenario would include increasing client volumes, net client account wins, and a successfully integrated turnaround plan and rebranding campaign with minimal client turnover, which would result in free operating cash flow (FOCF) to debt nearing 5% over the next 12 months. EXACTUS INC: Will Issue 1.9 Million Common Shares as Compensation ----------------------------------------------------------------- Effective Feb. 1, 2020, the Compensation Committee of Exactus, Inc.'s Board of Directors approved the issuance of a total of 1,955,000 shares of common stock to certain executives, employees, and consultants as compensation for services rendered. Of the shares issued, 955,000 shares are vested immediately and 1,000,000 shares will vest in equal monthly installments over the next two years. The shares were issued to a total of 13 individuals under the Company's 2019 Equity Incentive Plan, and the issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act. Following these issuances, a total of 48,986,825 shares of the Company's common stock are issued and outstanding. About Exactus Headquartered in Delray Beach, Florida, Exactus Inc. is dedicated to introducing hemp-derived phytocannabinoid products into mainstream consumer markets. Exactus has made investments in farming and has over 200 acres of CBD-rich hemp in Southwest Oregon. Exactus is introducing a range of consumer brands, such as Green Goddess Extracts, Paradise CBD, Levor Collection and Exactus. Hemp is a legal type of cannabis plant containing less than 0.3% THC (tetrahydrocannabinol), which is the psychoactive component of the cannabis plant. Exactus reported a net loss of $4.34 million in 2018 following a net loss of $3.86 million in 2017. As of Sept. 30, 2019, the Company had $11.45 million in total assets, $4.05 million in total liabilities, and $7.39 million in total equity. RBSM LLP, in New York, NY, the Company's auditor since 2014, issued a "going concern" qualification in its report dated March 29, 2019, citing that the Company has suffered recurring losses from operations, generated negative cash flows from operating activities, has an accumulated deficit and has stated that substantial doubt exists about Company's ability to continue as a going concern. FEMUR BUYER: S&P Downgrades ICR to B-; Outlook Stable ----------------------------------------------------- S&P Global Ratings lowered its issuer credit and issue-level ratings on Femur Buyer Inc. by one notch to 'B-' from 'B'. The '3' recovery rating for the first-lien debt remains unchanged. During the first three quarters of 2019, Femur Buyer Inc. reported weaker-than-expected revenue and EBITDA margins due to operational challenges, including the receipt of an FDA warning letter, inefficiency in consolidating facilities, and insufficient labor productivity. The downgrade reflects S&P's lower expectation for 2020 credit measures related to the operational challenges, which it expects will linger. Femur Buyer Inc. underperformed S&P's expectations for 2019 due to operational disruptions that affected operating efficiency and suppressed EBITDA margins. While it expects the FDA matters to be resolved by mid-2020, due to the scale of the issues, S&P cannot be certain when and how completely the company will return to stronger profitability and higher operating efficiency. The lower rating reflects that uncertainty, coupled with the rating agency's revised expectations for 2020. The company received a U.S. Food and Drug Administration (FDA) warning letter at one of its sites, requiring it to allocate additional resources for remediation. In addition, margins were adversely affected by greater-than-expected difficulty coordinating the transfer of resources associated with a facility consolidation process. Additionally, its human resource function has struggled to keep up with the pace of growth, particularly due to a labor shortage associated with low unemployment. S&P believes these factors will reduce revenues by about $50 million and EBITDA margin by about 400 basis points compared to the rating agency's prior 2020 projection. S&P's stable outlook reflects its estimate for revenue growth in the mid-single-digit percent area, limited free cash flow of about $10 million or less, and sustained leverage above 8x. "We could lower the rating if the company generates persistent cash flow deficits with limited prospects for improvement, which may suggest that the capital structure is unsustainable. This could happen if the company experiences a large contract loss, heightened competition and pricing pressure in the CMO industry," S&P said. "While unlikely over the next 12 months, we could raise our rating if the company reduces and sustains leverage at about 6x-7x and generates cash flow of over $15 million. We believe this could be achieved if the company rectifies the operational challenges and refocuses on growing its top line, expanding new product launches, and improving operating efficiency, resulting in strong revenue growth and a material EBITDA margin expansion," the rating agency said. FGL HOLDINGS: Moody's Reviews Ba3 Issuer Rating for Upgrade ----------------------------------------------------------- Moody's Investors Service has placed the ratings of FGL Holdings (LT issuer rating at Ba3, NYSE: FG) and the Baa2 insurance financial strength (IFS) ratings of FGL's insurance subsidiaries on review for upgrade following the company's announcement that it has entered into a definitive agreement to be acquired by Fidelity National Financial, Inc. (NYSE: FNF; senior unsecured at Baa2) for US$3.3 billion in cash and stock, including the assumption of FGL's senior notes and preferred stock. The transaction is expected to close in the second or third quarter of 2020, and is subject to shareholder and regulatory approvals. RATINGS RATIONALE According to Moody's, the review for upgrade of FGL's ratings is driven by its prospective alignment with the stronger credit profile of FNF, along with FNF's strong track record in making and integrating acquisitions. The combined organization would benefit from more diversified revenue and earning streams. Moody's expects FGL's business strategy and risk profile to remain essentially unchanged and the current management team and other key employees to remain in place. The review for upgrade also reflects the anticipated improvement in FGL's financial flexibility post-close, as it will benefit from its ownership by an ultimate parent with an ability to help support FGL's capital needs. Moody's review will focus on the approval and execution of the acquisition, ultimate organizational structure, and financial/capital management plans for FGL. While FGL's primary distribution channel is via independent marketing organizations (IMOs), it should be able to leverage FNF to further penetrate the broker/dealer channel and establish bank distribution relationships as well as potential cross selling opportunities. The strong capital generation and cash flows associated with FNF's title insurance business should benefit FGL in managing the capital strain of new business growth. The Baa2 IFS ratings of FGL's insurance subsidiaries reflect the company's growing market position in the fixed indexed annuity (FIA) space, solid capital levels and improved investment yield from portfolio repositioning efforts. Fidelity & Guaranty Life Insurance Company (FGLIC), the primary insurance operating entity has been able to balance the healthy growth of its FIA business, while expanding its modest footprint in the indexed universal life (IUL) insurance market. These strengths are offset by the concentration in FIAs, along with hedging challenges in writing FIAs, which similarly affect other writers of these products, and the company's relatively small size in a consolidating industry. RATING DRIVERS FGL's ratings could be upgraded upon closing of the transaction depending on Moody's assessment of implicit and explicit support and their continued stable operating performance and credit fundamentals in the coming quarters. Additional factors that could lead to an upgrade of the ratings include the following: (1) sustained statutory return on capital exceeding 6%; and (2) more balanced growth in profitably priced new FIA business and life insurance. Conversely, a termination of the planned transaction, with no material change to FGL's current financial profile, would most likely result in a confirmation of the current ratings with a stable outlook. The following ratings have been placed on review for upgrade: FGL Holdings -- issuer rating at Ba3; CF Bermuda Holdings Limited -- issuer rating at Ba2; F&G Life Re Ltd -- insurance financial strength rating at Baa2; Fidelity & Guaranty Life Insurance Company -- insurance financial strength rating at Baa2; Fidelity & Guaranty Life Holdings, Inc. -- senior unsecured debt rating at Ba2. The outlooks for the entities changed to Ratings Under Review from Stable. FGL Holdings is an insurance holding company headquartered in the Cayman Islands. As of September 30, 2019, FGL Holdings reported total assets of about $36 billion and shareholders' equity of approximately $2.6 billion. Moody's insurance financial strength ratings are opinions of the ability of insurance companies to pay punctually senior policyholder claims and obligations. The principal methodology used in these ratings was Life Insurers Methodology published in November 2019. FGL HOLDINGS: S&P Puts 'BB+' Long-Term ICR on Watch Positive ------------------------------------------------------------ S&P Global Ratings said it placed its 'BB+' long-term issuer credit ratings on nonoperating holding companies Fidelity & Guaranty Life Holdings Inc., FGL Holdings, and CF Bermuda Holdings Limited on CreditWatch with positive implications. S&P also placed its 'BBB+' financial strength and long-term issuer credit ratings on operating subsidiaries Fidelity & Guaranty Life Insurance Co.,Fidelity & Guaranty Life Insurance Co. of New York, and F&G Life Re Ltd. (collectively with the holding companies, F&G) on CreditWatch with positive implications. At the same time, S&P is affirming its 'BBB' long-term issuer credit rating on Fidelity National Financial Inc. (FNF) and its 'A' financial strength ratings on FNF's subsidiaries (collectively, Fidelity National). The outlook remains stable. The CreditWatch placement with positive implications on S&P's ratings for F&G follows the announcement of FNF's intention to acquire F&G for approximately $2.7 billion. S&P believes the acquisition is generally neutral to its view of F&G's business and financial risk, and it does not affect its view of overall stand-alone creditworthiness. The rating agency regards the company's business risk profile as satisfactory, driven by its concentration in fixed-indexed annuity product and independent market organization distribution, which makes it somewhat more vulnerable to adverse operating conditions. Additionally, the satisfactory financial risk profile is unaffected. As part of the transaction, S&P expects the preferred stock issuance at F&G to be redeemed. S&P expects this redemption to bring significant capital relief to F&G, prospectively, because it currently treats this as debt in the rating agency's capital analysis. Despite this, S&P forecasts capital adequacy per its capital model to remain at the 'BBB' confidence level over the next 24 months. As part of this transaction, the rating agency also expects F&G's management team and strategy to remain the same and expect it to be run somewhat independently from FNF. "If this transaction receives the necessary approvals and is completed, we expect to view F&G as moderately strategic to FNF and would likely raise our ratings on F&G by one notch. If the acquisition by FNF is unsuccessful, we will remove our ratings on F&G from CreditWatch and likely revert to our view of F&G on its own stand-alone merits," S&P said. The stable outlook on FNF reflects S&P's expectation that the group will maintain its strong competitive position, including favorable operating performance metrics and industry-leading market share. The rating agency also expects Fidelity National to maintain capital adequacy redundant at the very strong level. "We may lower our ratings if Fidelity National's competitive position weakens, reflecting a market share below 30%, and if its operating metrics decline significantly and we do not expect them to improve. We would also lower our ratings if capital adequacy were to deteriorate significantly and we believe it would not return to sustainable levels to support the rating," S&P said. "We are unlikely to raise the ratings on FNF in the next two years. Any upgrade would depend on a material sustainable increase in the group's market share and an improvement in capital adequacy," the rating agency said. FLUSHING AIRPORT: Case Summary & 2 Unsecured Creditors ------------------------------------------------------ Debtor: Flushing Airport Holdings LLC 131-05 53rd Ave College Point, NY 11356 Business Description: Flushing Airport Holdings LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). It is the fee simple owner of a property located at 131-05 23rd Avenue College Point NY, 11356 having a comparable sale value of $3 million. Chapter 11 Petition Date: February 11, 2020 Court: United States Bankruptcy Court Eastern District of New York Case No.: 20-40864 Debtor's Counsel: Mark Frankel, Esq. BACKENROTH FRANKEL & KRINSKY, LLP 800 Third Avenue New York, NY 10022 Tel: (212) 593-1100 Total Assets: $3,000,000 Total Liabilities: $8,302,724 The petition was signed by Maurizio Oppedisano, managing member. A copy of the petition containing, among other items, a list of the Debtor's two unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/J9Rj4O FRED’S INC: Unsecureds' Recovery in Liquidation To Be Determined ------------------------------------------------------------------ Debtors Fred’s, Inc., Fred’s Stores of Tennessee, Inc., National Equipment Management and Leasing, Inc., National Pharmaceutical Network, Inc., Reeves-Sain Drug Store, Inc., Summit Properties-Jacksboro, LLC, Summit Properties-Bridgeport, LLC, and 505 N. Main Opp, LLC filed with the U.S. Bankruptcy Court for the District of Delaware a Chapter 11 Plan that proposes a liquidation of the Debtors' assets. The Plan proposed by the Debtors provides that their orderly liquidation will be accomplished principally through elimination of most debt and all existing equity interests, and the issuance of cash to the Debtors' creditors as set forth in the Plan. The Plan proposed by the Debtors further provides, among other things, that after Confirmation and consummation of the Plan, a Liquidating Trustee will administer the Debtors' liquidation and oversee distributions to creditors, with oversight from a Liquidating Trust Advisory Committee. Under the Plan, Claims in Classes 1 Other Secured Claims and Class 2 Other Priority Claims are unimpaired, Under the Plan, Claims in Classes 3 General Unsecured Claims, Class 4 Intercompany Claims and Class 5 Sec. 510(b) Claims, and Interests in Class 6 are impaired. Under the Plan, each holder of an Allowed General Unsecured Claim in Class 3 will receive its pro rata share of an amount equal to the Distribution Proceeds, less any amounts that the Liquidating Trustee in its reasonable discretion determines to be necessary to be held to wind up the Debtors' affairs and administer the Liquidating Trust. The Disclosure Statement still has blanks as to the estimated percentage recovery for holders of unsecured claims. The Plan provides that all interests will be canceled and extinguished, and shall be of no further force or effect. No holder of interests will receive or retain any property under the Plan on account of such Interests. Interest holders are deemed to reject the Plan. In the months preceding the Petition Date, the Debtors had closed hundreds of stores. To monetize the Debtors’ inventory, the Debtors sought authority on the Petition Date through a motion to continue going-out-of-business sales at all of their remaining locations by October 31, 2019. This resulted in interim and final orders entered on September 11, 2019, and September 27, 2019, respectively. The Debtors held an auction for the sale of most of their real properties on Oct. 28, 2019. R.E. Wilson Enterprises, Inc., was the winning bidder for the Debtors' retail store real properties, with a bid of $22,300,000. Perry Ellis International, Inc., was the winning bidder for the Debtors' distribution center, with a bid of $15,700,000. The Bankruptcy Court entered orders authorizing the sale of most of the Debtors' store properties and distribution center free and clear of encumbrances to the winning bidders on October 30, 2019. A full-text copy of the Disclosure Statement dated Jan. 21, 2020, is available at https://tinyurl.com/s9zlc2k from PacerMonitor.com at no charge. The Debtors are represented by: Adam L. Shiff Robert M. Novick Matthew B. Stein Shai Schmidt KASOWITZ BENSON TORRES LLP 1633 Broadway New York, New York 10019 Telephone: (212) 506-1700 Facsimile: (212) 506-1800 - and - Derek C. Abbott Andrew R. Remming Joseph C. Barsalona II MORRIS, NICHOLS, ARSHT & TUNNELL LLP 1201 North Market Street, 16th Floor P.O. Box 1347 Wilmington, Delaware 19899 Telephone: (302) 658-9200 Facsimile: (302) 658-3989 About Fred's Inc. Since 1947, Fred's, Inc. (NASDAQ:FRED) -- http://www.fredsinc.com/ -- has been an integral part of the communities it serves throughout the southeastern United States. Fred's mission is to make it easy AND exciting to save money. Its unique discount value store format offers customers a full range of value-priced everyday items, along with terrific deals on closeout merchandise throughout the store. Fred's, Inc., and its subsidiaries sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 19-11984) on Sept. 9, 2019 in Delaware. In the petitions signed by Joseph M. Anto, CEO, the Debtors disclosed $474,774,000 in assets and $380,167,000 in liabilities as of May 4, 2019. The Hon. Christopher S. Sontchi oversees the cases. The Debtors tapped Morris, Nichols, Arsht & Tunnell LLP as counsel; Kasowitz Benson Torres LLP as general bankruptcy counsel; Akin Gump Strauss Hauer & Feld LLP as special counsel; Epiq Bankruptcy Solutions LLC as claims and noticing agent; and Berkeley Research Group, LLC, as financial advisor. FTS INTERNATIONAL: Receives Noncompliance Notice from NYSE ---------------------------------------------------------- FTS International, Inc. has received written notice from the New York Stock Exchange notifying it that, over a period of 30 consecutive trading days, the average closing price of the Company's common stock was below the minimum $1.00 per share requirement for continued listing on the NYSE under Item 802.01C of the NYSE Listed Company Manual. In accordance with applicable NYSE procedures, the Company plans to timely notify the NYSE that it intends to cure the $1.00 per share deficiency and has six months following the receipt of the noncompliance notice to cure the deficiency and regain compliance with the NYSE continued listing requirement. The notice has no immediate impact on the listing of the Company's common stock, which will continue to trade on the NYSE. The Company intends to actively monitor the closing share price for its common stock and will explore available options to regain compliance. About FTS International Headquartered in Fort Worth, Texas, FTS International -- http://www.FTSI.com/-- is an independent hydraulic fracturing service company. Its services enhances hydrocarbon flow from oil and natural gas wells drilled by E&P companies in shale and other unconventional resource formations. * * * As reported by the TCR on Jan. 14, 2020, Moody's Investors Service downgraded FTS International, Inc.'s Corporate Family Rating to Caa1 from B3. The downgrade of FTSI's rating reflects continued challenges to the operating environment, increased debt refinancing risks and bonds meaningfully below par which elevates risk of a distressed debt exchange that could be deemed a default by Moody's. In November 2019, S&P Global Ratings lowered its issuer credit rating on FTS International Inc. (FTSI) to 'CCC+' from 'B' and revised the outlook to negative from stable. S&P said the downgrade reflects soft industry fundamentals, predominantly in the U.S. market, and weakening financial measures for FTSI with minimal cash flow prospects at this time. GENCANNA GLOBAL: Files for Chapter 11, Obtains $10M DIP Financing ----------------------------------------------------------------- GenCanna Global USA, Inc., on Feb. 6, 2020, disclosed that it has filed a petition for voluntary Chapter 11 reorganization with the U.S. Bankruptcy Court in the Eastern District of Kentucky. The filing will allow GenCanna to continue to operate its business without interruption to customers, vendors, partners and employees while working through a reorganization plan that could include refinancing of the Company's existing indebtedness, or an alternative restructuring transaction such as a sale. GenCanna has obtained approximately $10 million in post-petition debtor-in-possession (DIP) financing from its senior lender, which, subject to Court approval, will provide the Company with liquidity to maintain its operations in the ordinary course of business during the Chapter 11 process. "We are taking this action in order to position our business for success in a highly dynamic and rapidly evolving industry," said Matty Mangone Miranda, Chief Executive Officer of GenCanna Global. "While this is certainly not the outcome we desired, the bankruptcy process gives us the ability to move forward in a way that allows us to best continue operations and serve customers as we work through our reorganization, resolve an outstanding legal dispute involving our Western Kentucky facility, navigate an uncertain regulatory environment and adjust our annual operating costs to better match the landscape." Mr. Miranda added, "Through this restructuring, we plan to address certain structural issues that we could not fix on our own. We are grateful for the continued support of our existing senior lender, who recognizes the strength of our brand, and we will continue to work tirelessly on behalf of our employees, farmers, and vendor partners." GenCanna has hired the following professionals to assist with its restructuring. Huron Consulting Services LLC is serving as Operational Advisor, Jefferies LLC is serving as financial advisor, and Benesch Friedlander Coplan & Aronoff LLP along with Dentons Bingham Greenebaum LLP is serving as the Company's legal counsel in connection with the Chapter 11 case. For more information about the Chapter 11 case, including access to Court documents, please visit: https://dm.epiq11.com/GenCanna. About GenCanna Global GenCanna Global USA, Inc. -- https://gencanna.com/ -- is a vertically-integrated producer of hemp and hemp-derived CBD products with a focus on delivering social, economic, and environmental impact through seed-to-scale agricultural production. GenCanna Global USA was the subject of an involuntary Chapter 11 proceeding (Bankr. E.D. Kent. Case No. 20-50133-GRS) filed on Jan. 24, 2020. The involuntary petition was signed by alleged creditors Pinnacle, Inc., Crawford Sales, Inc., and Integrity/Architecture, PLLC. Laura Day DelCotto, Esq., at DELCOTTO LAW GROUP PLLC, is representing the petitioners. GNC HOLDINGS: FMR LLC Reports Ownership of 9.1% Class A Shares -------------------------------------------------------------- In an amended Schedule 13g filed with the Securities and Exchange Commission on Feb. 6, 2020, FMR LLC and Abigail P. Johnson disclosed that they beneficially own 7,714,120 shares of Class A common stock of GNC Holdings, Inc., which represents 9.122% percent of the shares outstanding. Fidelity Series Intrinsic Opportunities Fund also reported beneficial ownership of 5,939,600 Class A Shares. A full-text copy of the SEC filing is available filing is available for free at: https://is.gd/cmFETi About GNC Holdings GNC Holdings, Inc., headquartered in Pittsburgh, PA, is a global health and wellness brand with a diversified, multi-channel business. The Company's assortment of performance and nutritional supplements, vitamins, herbs and greens, health and beauty, food and drink and other general merchandise features innovative private-label products as well as nationally recognized third-party brands, many of which are exclusive to GNC. The Company serves consumers worldwide through company-owned retail locations, domestic and international franchise activities, and e-commerce. As of Sept. 30, 2019, GNC had approximately 7,800 locations, of which approximately 5,700 retail locations are in the United States (including approximately 1,900 Rite Aid licensed store-within-a-store locations) and the remainder are locations in approximately 50 countries. GNC Holdings reported net income of $69.78 million for the year ended Dec. 31, 2018, compared to a net loss of $150.26 million for the year ended Dec. 31, 2017. As of Sept. 30, 2019, the Company had $1.68 billion in total assets, $1.64 billion in total liabilities, $211.39 million in convertible preferred stock, and a total stockholders' deficit of $175.66 million. * * * As reported by the TCR on Nov. 15, 2018, S&P Global Ratings affirm ed its 'CCC+' issuer credit rating on Pittsburgh-based vitamin and supplement retailer GNC Holdings Inc. and removed all of its ratings on the company from CreditWatch, where S&P placed them with negative implications on Feb. 14, 2018. "The affirmation reflects our belief that GNC's capital structure remains unsustainable over the long term in light of its current operating performance, including its cash flow generation, because of increased competitive threats amid the ongoing secular changes in the retail industry," S&P said. GOMEZ GLOBAL: Feb. 26 Plan & Disclosures Hearing Set ---------------------------------------------------- On Jan. 15, 2020, debtor Gomez Global, LLC, filed a Disclosure Statement under Chapter 11 of the Bankruptcy Code, along with a proposed Chapter 11 Plan of Reorganization. On Jan. 21, 2020, Judge Harlin Dewayne Hale conditionally approved the Disclosure Statement and established the following dates and deadlines: * Feb. 21, 2020, is fixed as the last day for filing written acceptances or rejections of the Debtor's proposed Chapter 11 Plan. * Feb. 21, 2020, is fixed as the last day for filing and serving written objections to final approval of the Debtor's Disclosure Statement; or confirmation of the Debtor's proposed Chapter 11 Plan. * Feb. 26, 2020, at 2:00 p.m. in the courtroom of the Honorable Harlin D. Hale, United States Bankruptcy Court, 1100 Commerce Street, 14th Floor, Dallas, Texas is the hearing to consider final approval of the Debtor's Disclosure Statement and to consider the confirmation of the Debtor's proposed Chapter 11 Plan. A full-text copy of the order dated Jan. 21, 2020, is available at https://tinyurl.com/stjqwhn from PacerMonitor.com at no charge. About Gomez Global LLC Gomez Global LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 19-33165) on Sep. 24, 2019. At the time of the filing, the Debtor was estimated to have assets under $50,000 and liabilities under $500,000. Judge Harlin Dewayne Hale is assigned to the case. The Debtor is represented by Joyce W. Lindauer Attorney, PLLC. GROWLIFE INC: Closes $500K Securities Purchase Agreement with CVP ----------------------------------------------------------------- On Jan. 30, 2020, GrowLife, Inc. executed the following agreements with Chicago Venture Partners, L.P.: (i) Securities Purchase Agreement; (ii) Secured Convertible Promissory Notes; and (iii) Security Agreement. The Company entered into the CVP Agreements with the intent to acquire working capital to grow the Company's businesses. The total amount of funding under the CVP Agreements is $500,000 in various tranches. The Notes carry an original issue discount of $50,000 and a transaction expense amount of $5,000, for total debt of $555,000. The Company agreed to reserve eight million shares of its common stock for issuance upon conversion of the Debt, if that occurs in the future. If not converted sooner, the Debt is due on or before Jan. 30, 2021. The Debt carries an interest rate of ten percent. The Debt is convertible, at CVP's option, into the Company's common stock at $0.30 per share subject to adjustment as provided for in the Notes. The Company's obligation to pay the Debt, or any portion thereof, is secured by all of the Company's assets. About GrowLife Kirkland, WA-based GrowLife, Inc. is a provider of organics, herbs and greens, and plant-based medicines. The Company primarily sells through its wholly owned subsidiary, GrowLife Hydroponics, Inc. GrowLife companies distribute and sell over 15,000 products through its e-commerce distribution channel, GrowLifeEco.com, and through its regional retail storefronts. GrowLife and its business units are organized and directed to operate strictly in accordance with all applicable state and federal laws. GrowLife reported a net loss of $11.47 million for the year ended Dec. 31, 2018, compared to a net loss of $5.32 million for the year ended Dec. 31, 2017. As of Sept. 30, 2019, the Company had $4.62 million in total assets, $6.77 million in total current liabilities, $445,927 in non-current portion of right of use liability, a total stockholders' deficit of $4.44 million, and $1.84 million in non-controlling interest in EZ-Clone Enterprises, Inc. SD Mayer & Associates, LLP, in Seattle, Washington, the Company's auditor since 2016, issued a "going concern" qualification in its report dated March 8, 2019 citing that the Company has sustained a net loss from operations and has an accumulated deficit since inception. These factors raise substantial doubt about the Company's ability to continue as a going concern. H & B HOLDINGS: Court Grants 90-Day Access to Cash Collateral ------------------------------------------------------------- Judge Clifton R. Jessup, Jr., authorized H&B Holdings Inc., to use cash collateral nunc pro tunc to November 12, 2019 until 90 days from date of entry of this order, or if the Debtor uses the cash collateral for any reason not approved by the Court under this order. The Court ruled that the Debtor may use the cash collateral to pay actual expenses reasonable and necessary to the operation and maintenance of its business in the ordinary course, pursuant to the budget, and to pay fees to the Clerk of the Bankruptcy Court and the Office of the United States Bankruptcy Administrator. The Court further ruled that as adequate protection, lenders First Metro Bank and CB&S Bank each are granted a replacement lien on and in all of the Debtor's assets that comprise the collateral to the same extent and priority as the interest of said lenders existed as of the Petition Date. As of the filing of its petition, the Debtor borrowed funds from (a) First Metro in the principal amount of $3,800,172, evidenced by a promissory note dated January 17, 2012, and from (b) CB&S in the principal amount of $1,208,121.75, evidenced by a promissory note dated December 20, 2018. Each of the debts were secured by a security interest in all of Debtor's accounts, inventory, equipment, general intangibles, and the proceeds, products, accessions and additions thereto. A copy of the order is available for free at https://is.gd/UOwcvo from PacerMonitor.com. About H&B Holdings H&B Holdings Inc. is a privately held company in the wholesale lumber business. H&B Holdings, Inc., based in Tuscumbia, AL, filed a Chapter 11 petition (Bankr. N.D. Ala. Case No. 19-82417) on Aug. 13, 2019. In the petition signed by Harvey F. Robbins, III, president, the Debtor disclosed $236,441 in assets and $7,641,392 in liabilities. The Hon. Clifton R. Jessup Jr. oversees the case. Stuart M. Maples, Esq., at Maples Law Firm, P.C., serves as bankruptcy counsel. HAGAMAN PROPERTY: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Hagaman Property Development, LLC 1172 Fischer Blvd. Toms River, NJ 08753 Business Description: Hagaman Property Development LLC is a property development company. Chapter 11 Petition Date: February 11, 2020 Court: United States Bankruptcy Court District of New Jersey Case No.: 20-12271 Debtor's Counsel: Eugene D. Roth, Esq. LAW OFFICE OF EUGENE D. ROTH 2520 Highway 35, Suite 307 Manasquan, NJ 08736 Tel: 732-292-9288 E-mail: erothesq@gmail.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Robert Hagaman, managing member. A copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/zG2BhR HARSCO CORP: Fitch Affirms 'BB' IDR & Alters Outlook to Negative ---------------------------------------------------------------- Fitch Ratings affirmed Harsco Corporation's Long-Term Issuer Default Rating at 'BB', secured revolver and term loan at 'BB+'/'RR1', and senior unsecured notes at 'BB'/'RR4'. The Rating Outlook has been revised to Negative from Stable. Harsco had $792 million of debt outstanding as of Sept. 30, 2019. These actions follow Harsco's announcement that it has agreed to acquire Stericycle's Environmental Solutions business for $462.5 million in cash. Management expects ESOL to generate revenues of $550 million and EBITDA of $35 million in 2020, and expects to generate run rate cost synergies of $15 million by the third year of ownership. Harsco intends to finance the acquisition with borrowings under its revolving credit facility and new debt financing. The acquisition is expected to close by the end of the first quarter of 2020. KEY RATING DRIVERS Negative Outlook: The Negative Outlook reflects elevated financial leverage following the ESOL acquisition, currently weak operating results within the ESOL business as well as in Harsco's rail and environmental businesses, and the challenges associated with integrating two sizable acquisitions -- ESOL and the recently-acquired Clean Earth. Higher Financial Leverage: Pro forma for the acquisition, debt/EBITDA is in the mid-3.0x range, compared with leverage of 1.9x as of the end of 2018. Fitch expects leverage will improve to around 3.0x over two years through a combination of EBITDA growth and debt reduction from FCF. Leverage is moderately high for the rating, and the expected deleveraging depends on successfully integrating the two acquisitions and on steady demand from the company's end markets. Following the ESOL acquisition, there will be limited headroom in the rating for operating shortfalls or further end-market weakness. Portfolio Shift: Harsco's portfolio has undergone a significant shift over the past year, with the completion of another large acquisition, that of Clean Earth, in mid-2019, and the sale of the company's three industrial businesses. These transactions give Harsco a meaningful presence in environmental solutions and, in particular, hazardous waste disposal, while reducing its exposure to the cyclical industrial sector. Hazardous waste disposal, which will represent around 40% of Harsco's revenues, is less cyclical than Harsco's other businesses and has solid long-term growth prospects. Cyclical End-Markets: The recent portfolio shift notwithstanding, Harsco faces meaningful cyclicality in its other operations, which are tied to the level of steel production, metals prices, and investment in rail equipment end-markets, with particular exposure to steel and mineral markets. The company is currently experiencing weaker results in its rail business as a result of operational challenges and shipment deferrals, and in its Harsco Environmental business due to lower services demand and weaker production levels at its steel mill customers. FCF Constrained: Fitch expects FCF will be constrained by currently weaker margins at ESOL and by elevated levels of growth capex within Harsco Environmental, due to the potential for new contracts at existing locations and with mills in emerging markets. FCF should nonetheless remain positive, approaching 2% of revenues over the medium term. FCF is expected to be used for debt reduction, with acquisitions on hold while the company focuses on integrating ESOL and Clean Earth. DERIVATION SUMMARY Harsco is a diversified manufacturer and service provider that participates in a variety of end-markets, each of which has a different set of competitors. Another diversified industrial in the 'BB' category is Trinity Industries, a manufacturer and lessor of rail cars. When compared with Trinity's manufacturing operations, Harsco has lower financial leverage and generates higher EBITDA margins. Trinity has a substantial railcar leasing business that broadens its scale and helps to mitigate the cyclicality in its railcar manufacturing operations. No country-ceiling, parent/subsidiary or operating environment aspects affect the rating. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- The acquisition of ESOL is assumed in the forecast to have taken place on Jan. 1, 2020; -- Sales grow by close to 50% in 2020 due to acquisitions of Clean Earth and ESOL which follow divestitures of Harsco's industrial businesses in 2019. Sales grow by 4% annually thereafter; -- EBITDA margins are moderately lower in 2019 and 2020 due to weakness in the businesses and the mix effect of the ESOL acquisition. Margins recover gradually beginning in 2021; -- FCF is estimated at 1%-2% of revenues beginning in 2020; -- Debt levels increase to $1.2 billion in 2020 and decline gradually thereafter. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- The company develops into a larger, more diversified operation; -- Stronger FCF generation; -- Debt/EBITDA sustained under 2.5x and FFO-adjusted leverage under 3.5x. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Debt/EBITDA remains above 3.25x and FFO-adjusted leverage remains above 4.0x-4.25x; -- Negative FCF on a sustained basis. LIQUIDITY AND DEBT STRUCTURE Harsco's liquidity at Sept. 30, 2019 was supported by cash of $75 million and a $700 million secured revolver maturing in November 2021, on which an estimated $613 million was available. Harsco's debt structure as of Sept. 30, 2019 consisted of $57 million drawn on the secured revolver, $218 million outstanding on a secured term loan maturing in December 2024, $500 million of senior unsecured notes due 2027, and $16 million of other borrowings and overdrafts. The collateral backing the credit facilities includes the capital stock of each direct subsidiary (65% of stock of first-tier foreign subsidiaries) and substantially all of the company's domestic tangible and intangible assets. In addition, all of the company's domestic, wholly owned restricted subsidiaries guarantee the facilities and the notes. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch has made no material adjustments that are not disclosed within the company's public filings. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of 3 - ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. HECLA MINING: Moody's Rates Proposed $475MM Sr. Unsec. Notes Caa1 ----------------------------------------------------------------- Moody's Investors Service assigned a Caa1 senior unsecured rating to Hecla Mining Company's proposed $475 million senior unsecured notes due 2028. Proceeds from this issue along with cash on hand will be used to redeem $506.5 million of the existing senior unsecured notes due 2021 and pay for the related transaction fees and expenses. All other ratings for Hecla are unchanged. The Speculative Grade Liquidity Rating remains SGL-3. The outlook is stable. Upon repayment, the rating on the notes maturing in 2021 will be withdrawn. Assignments: Issuer: Hecla Mining Company Senior Unsecured Regular Bond/Debenture, Assigned Caa1(LGD4) RATINGS RATIONALE Hecla's B3 corporate family rating (CFR) reflects its modest scale, exposure to volatile gold, silver, zinc and lead prices, relatively high cost position and elevated but declining leverage. Hecla's CFR is supported by its adequate liquidity position and favorable geopolitical footprint with assets located in the US, Canada and Mexico, albeit with high asset concentration risk, given that its Greens Creek mine in Alaska currently generates most of the company's operating earnings. The rating also benefits from the long mine life at key operations, significant mineral reserves and geologically attractive portfolio of exploration assets. The recently ratified agreement between the company and the Lucky Friday mine union put an end to the strike that lasted nearly 3 years. The rating anticipates that, once in full production, Lucky Friday will enhance the company's operational diversity and further improve its credit profile. However, the rating also factors in the relatively high execution risks related to the Lucky Friday ramp-up, an uncertainty around the cost structure post ramp-up as well as the company's efforts to reduce costs at the Casa Berardi mine. The ratings acknowledges that significant mineral reserves and long mine life provide the company with substantial optionality to optimize production and operating costs at these assets. The initiatives undertaken by Hecla in 2019 to reduce spending, improve liquidity and leverage as well as the continued strong operating performance at the Greens Creek mine and substantially higher gold and silver prices have positioned the company to return to positive free cash flow and higher EBITDA generation from H2 2019. Hecla was able to implement multiple cost-cutting initiatives at Nevada including mining of only developed reserves, lowering development capex and G&A and reducing the mine's all-in sustaining costs (AISC) sharply from $2,347/oz in Q2 to about $1,000/oz in H2 2019. Casa Berardi's costs declined more moderately with lower capital spending driving the improvement in Q4. This allowed the mine to generate positive free cash flow in H2, albeit gold AISC remained relatively high at $1,278/oz in Q4. The company is guiding for a modest improvement of Casa Berardi's AISC in 2020 to $1,225 - $1,275/oz and is currently conducting studies to raise throughput, recovery rates, lower costs and increase cash flows at the mine. Hecla's leverage, measured as Moody's adjusted debt/EBITDA, improved from 8x in Q2 2019 to 6x at the end of Q3 2019 and about 3.5x as of 2019 year-end, benefitting from higher EBITDA, the exchange of $31m of Ressources Quebec notes and the $49m "At The Market" equity offering completed in Q4, which along with generated cash, enabled the company to fully repay by the year-end the $50 million previously drawn from the revolving credit facility. Using price sensitivities of $1,200-1,300/oz for gold and $15.50-17.00/oz for silver, Moody's expects Hecla to generate moderate free cash flow in 2019 and 2020 and estimates that debt/EBITDA will be in the range of 3.6-4.3x. Leverage is expected to be lower and free cash flow higher if gold and silver prices do not decline materially from the currently high levels. Hecla faces a number of ESG risks, typical for a mining company, including the risks related to the environmental and asset retirement obligations, water management and water rights, litigation matters associated with Nevada operations and diminished, yet still present, social risks related to the Lucky Friday mine, notwithstanding the ratification of the collective bargaining agreement by the local union. Hecla's SGL-3 rating reflects the company's adequate liquidity profile with $62 million in cash and cash equivalents as of 2019 year-end with the undrawn $250 million revolving line of credit (RCF) that is currently limited to $150 million. The proposed credit agreement amendment is expected to extend the maturity of the RCF to 2023 and restore the availability to $250 million upon closing of the bond refinancing. The amendment will also permit Hecla to use $100 million of the revolver proceeds to redeem some of the existing notes provided Hecla issues the new notes in an amount of not less than $400 million. The RCF is secured by assets of some of Hecla's Nevada subsidiaries, Casa Berardi mine, the company's assets in the Greens Creek mine JV and equity interests in certain domestic subsidiaries. Financial covenants include a senior leverage ratio (debt secured by liens/EBITDA) of no more than 2.5x, a minimum interest coverage ratio of 3x and a leverage ratio (total debt minus unencumbered cash/EBITDA) of no more than 4.25x for Q1 2020 and Q2 2020, stepping down to 4x for Q3 2020 and thereafter. Moody's expects the company to remain in compliance with the amended covenants. Moody's believes that the refinancing risk for the company's senior unsecured notes has diminished given the benign gold and silver price environment, the improvement in credit profile and the resolution of the Lucky Friday strike. Under Moody's Loss Given Default Methodology, the Caa1 rating on the senior unsecured notes, one notch below the CFR, reflects their lower priority position in the capital structure and their effective subordination to the RCF (unrated). The notes will be guaranteed on a senior unsecured basis by the majority of the company's subsidiaries. Non-guarantor subsidiaries represented about 8% of Hecla's FY2019 sales and 5% of total assets as of December 31, 2019. The stable outlook reflects its expectations that Hecla will sustain current performance at Nevada until operations are shut down, increase the profitability at the Casa Berardi mine and ramp up Lucky Friday to full production as planned. The outlook also anticipates that the company will maintain an adequate liquidity position while continuing its investments in capital and exploration projects. The ratings are unlikely to be upgraded in the near term given the uncertainty around the timing of the ramp-up and the eventual cost structure at Lucky Friday as well as the execution risk with respect to the company's efforts to increase production and reduce operating costs at Casa Berardi. However, an upgrade would be considered if the company maintains a leverage ratio below 3.5x (debt/EBITDA) and sustains a positive EBIT margin of at least 6%. The ratings could be downgraded if debt/EBITDA is sustained above 4.5x, EBIT margins below negative 5% and cash flow from operations below 10% of outstanding debt. The ratings could also be downgraded if the company's liquidity position weakens materially or if uncertainty increases over its ability to refinance the upcoming unsecured debt maturities. The principal methodology used in this rating was Mining published in September 2018. Headquartered in Coeur d'Alene, Idaho, Hecla Mining Company is primarily a gold and silver producer with zinc and lead by-products. The company operates mines in Alaska (Greens Creek), Idaho (Lucky Friday), Quebec Canada (Casa Berardi), Mexico (San Sebastian) and Nevada (former Klondex mines). Hecla also owns several other exploration and pre-development properties, including the geologically attractive Hatter Graben vein system on its Hollister property in Nevada. For the twelve months ended December 31, 2019, Hecla generated revenues of $673 million. HECLA MINING: S&P Assigns Prelim 'B' Rating to $475MM Senior Notes ------------------------------------------------------------------ S&P Global Ratings assigned its preliminary 'B' issue-level rating and '3' recovery rating to the $475 million senior notes due in 2028 proposed by silver and gold producer Hecla Mining Co. to refinance its $500 million senior unsecured notes due May 2021 ($507 million outstanding). These ratings are not on CreditWatch. At the same time, S&P placed all of its other ratings on Hecla, including its 'B-' issuer credit rating on CreditWatch with positive implications. S&P expects the refinancing to eliminate a key ratings constraint. The refinancing will materially reduce Hecla's maturity risk given that the vast majority of its current capital structure becomes current in May 2020. The refinancing risk related to the company's upcoming maturity could hurt its credit quality if management is unable to complete the refinancing. If successful, the refinancing pushes out this maturity eight years to 2028. In addition, the amendment to the company's revolving credit facility (unrated) pushes its maturity out eight months to 2023, enhances liquidity, and provides access to the full $250 million. It also provides Hecla with the ability to use $100 million toward repayment of the bonds. The CreditWatch placement indicates that there is a one-in-two likelihood S&P will raise its rating on Hecla Mining Co. within the next 90 days. However, S&P intends to resolve the CreditWatch listing as soon as the senior notes refinancing has closed and the rating agency has a chance to reassess the company's capital structure. "We could raise the rating on Hecla Mining to 'B' at that time we resolve the CreditWatch placement if it has completed the refinancing and maintains leverage below 4x," S&P said. "We could lower our rating on Hecla Mining if it does not complete the senior notes refinancing within the next 30 days because this could indicate weaker access to capital markets, and its existing senior notes become current in May 2020," the rating agency said. IBIO INC: Postpones Annual Meeting to March 5 --------------------------------------------- IBio, Inc.'s 2019 annual meeting of stockholders originally scheduled to be held on Monday, Feb. 10, 2020, has been postponed and will now be held on March 5, 2020, at 9:30 a.m. ET. iBio decided to postpone the Annual Meeting after becoming aware that the Definitive Proxy Statement filed with the Securities and Exchange Commission on Jan. 23, 2020 was not timely delivered to beneficial holders of the Company's common stock before the originally scheduled meeting date. The Annual Meeting has been postponed to March 5, 2020 to ensure that all stockholders receive materials required by the proxy rules under the Securities Exchange Act of 1934 and the requirements under Schedule 14A. No changes have been made to the record date, the location of the meeting or the proposals to be brought before the Annual Meeting, which are presented in the Proxy Statement. About iBio, Inc. iBio, Inc. -- www.ibioinc.com -- is a biotechnology company focused on using its proprietary technologies and production facilities to provide product development and manufacturing services to clients, collaborators and third-party customers as well as developing and commercializing its own product candidates; and a full-service plant-based expression biologics CDMO equipped to deliver pre-clinical development through regulatory approval, commercial product launch and on-going commercial phase requirements. iBio's FastPharmingTM expression system, iBio's proprietary approach to plant-made pharmaceutical (PMP) production, can produce a range of recombinant products including monoclonal antibodies, antigens for subunit vaccine design, lysosomal enzymes, virus-like particles (VLP), blood factors and cytokines, scaffolds, maturogens and materials for 3D bio-printing and bio-fabrication, biopharmaceutical intermediates and others, as well as create and produce proprietary derivatives of pre-existing products with improved properties. iBio reported a net loss attributable to the Company of $17.85 million for the year ended June 30, 2019, compared to a net loss attributable to the Company of $16.36 million for the year ended June 30, 2018. As of Sept. 30, 2019, iBio had $35.16 million in total assets, $37.10 million in total liabilities, and a total deficiency of $1.94 million. CohnReznick LLP, in Roseland, New Jersey, the Company's auditor since 2010, issued a "going concern" qualification in its report dated Aug. 26, 2019, citing that the Company has incurred net losses and negative cash flows from operating activities for the years ended June 30, 2019 and 2018 and has an accumulated deficit as of June 30, 2019. These matters, among others, raise substantial doubt about the Company's ability to continue as a going concern. INSPIRED CONCEPTS: Court Grants Cash Access Thru Feb. 14 -------------------------------------------------------- Judge Daniel S. Opperman authorized Inspired Concepts, LLC to use $884,216 of cash collateral retroactive to the Petition Date through February 14, 2020. As adequate protection, the Debtor is authorized and directed to pay (a) Fifth Third Bank adequate protection in the amount of $2,500 per month, and (b) Mercantile Bank the amount of $700 per month, which amounts will be applied first toward interest. To the extent the adequate protection payment is greater than the interest due on each of the Debtor's indebtedness to Fifth Third and Mercantile Bank, the difference will be applied to principal. To the extent said debts (if subsequently validated) are determined to be less than fully secured under Section 506(b) of the Bankruptcy Code, the Debtor may seek to have some or all payments re-characterized as principal payments. The Court further ruled that the secured creditors are provided replacement liens on and security interests in all of the Debtor's post-petition assets. The Debtor may pay its legal counsel up to $7,500 per month, and any other professional retained pursuant to Section 327 of the Bankruptcy Code, which payments will be held in escrow pending Court approval. In the event no objections are filed within 14 days from entry of this interim order, the Court ruled that this order will be continued on an interim basis for an additional 120 days unless otherwise ordered by the Court. Thereafter, this interim order and the cash collateral period will be further extended, without further Court order, pursuant to the consent of the Debtor and the secured creditors for an additional 120 days period, which consent shall not unreasonably be withheld. A copy of the interim order is available for free at https://is.gd/SL7snR from PacerMonitor.com. About Inspired Concepts Inspired Concepts LLC, a privately held investment and restaurant management company in Mt. Pleasant, Mich., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 20-20034) on Jan. 10, 2020. At the time of the filing, the Debtor had estimated assets of between $500,000 and $1 million and liabilities of between $1 million and $10 million. Judge Daniel S. Opperman oversees the case. Jeffrey Grasl, Esq., at Grasl, PLC, is the Debtor's legal counsel. INSPIRED CONCEPTS: Seeks to Use Fifth Third, Mercantile Banks’ Cash --------------------------------------------------------------------- Inspired Concepts, LLC, asked the Bankruptcy Court to authorize use of cash collateral to pay postpetition operating expenses in the ordinary course. The Debtor believes that Fifth Third Bank will assert a first lien position, as of the Petition Date, of approximately $2,036,232 on the cash collateral and other property of the Debtor pursuant to multiple loan documents entered into between the Debtor and Fifth Third prior to the Petition Date. The Debtor also anticipates that Mercantile Bank may assert a lien in cash collateral and other personal property of the Debtor for approximately $405,193 pursuant to loan documents entered prior to the Petition Date. As adequate protection for the use of cash collateral, the Debtor proposes: (a) adequate protection payments to Fifth Third Bank at $2,000 per month representing interest only payments at 6% based on an estimated value of the assets securing the Fifth Third Obligations at $400,000; (b) adequate protection payments to Mercantile in the amount of $400 per month; (c) replacement liens for each of Fifth Third and Mercantile in the Debtor's post-petition assets to the extent of any diminution in value of their interests in the Debtor's prepetition assets to the extent deemed allowable. A copy of the motion is available at https://is.gd/DgWAfa from PacerMonitor.com at no charge. About Inspired Concepts Inspired Concepts LLC, a privately held investment and restaurant management company in Mt. Pleasant, Mich., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 20-20034) on Jan. 10, 2020. At the time of the filing, the Debtor had estimated assets of between $500,000 and $1 million and liabilities of between $1 million and $10 million. Judge Daniel S. Opperman oversees the case. Jeffrey Grasl, Esq., at Grasl, PLC, is the Debtor's legal counsel. K & M SPRAYING: Has Permission to Use Cash Collateral Until Feb. 14 ------------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Arkansas authorized K & M Spraying, LLC to continue using cash collateral on an interim basis. Smart Freight Funding, LLC has a first-position security interest in Debtor's cash collateral and has agreed to allow the Debtor to use the cash collateral to fund its ongoing operations through Feb. 14, 2020 on the following conditions: (a) The Debtor will pay Smart Freight $600 per week in adequate protection payments; and (b) Smart Freight is granted an additional and replacement continuing, valid, binding, non-voidable and automatically and properly perfected security interest in and lien on all of Debtor's pre-petition and post-petition assets, as well as products and proceeds thereof. In the event the Debtor files a Second Motion for Use of Cash Collateral prior to the Feb. 14, Smart Freight agrees to the extension of the other terms in the Order until March 13, 2020, notwithstanding the Feb. 14 deadline, to allow the Debtor to continue to operate while the Second Motion for Use of Cash Collateral is considered. A copy of the Order is available at PacerMonitor.com at https://is.gd/7bPlU4 at no charge. About K & M Spraying K & M Spraying, LLC, a company that provides crop spraying services, filed a Chapter 11 petition (Bankr. E.D. Ark. Case No. 19-16314) on Nov. 26, 2019, in Pine Bluff, Ark. The petition was signed by Thomas M. Perry, president. At the time of the filing, the Debtor disclosed $1,439,202 in assets and $1,706,381 in liabilities. Judge Richard D. Taylor oversees the case. Natural State Law, PLLC is the Debtor's legal counsel. The Office of the U.S. Trustee on Jan. 9, 2020, disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Debtor's case. KAIROS HOMES: Permitted to Sell Certain Properties to Pay UST ------------------------------------------------------------- Judge Mark X. Mullin of the U.S. Bankruptcy Court for the Northern District of Texas inked his approval to an Agreed Order authorizing Kairos Homes L.L.C. to sell the following lots free and clear of any claims of the Internal Revenue Service and to pay $20,000 from each lot sale to the Office of the U.S. Trustee. Lot 23 Block 1 Phase 2 of Clairmont City of Weatherford, Parker County, Texas As Lot 23 Old Authon Road 76088 Sales Price: $299,000 Purchaser: Armando Armendariz, Marialuisa Armendariz Lot 1R Block 1 Phase 1 of Clairmont City of Weatherford, Parker County, Texas As Lot 1 Old Authon Road 76088 Sales Price: $279,000 Purchaser: Ashlie Leann Johnson, Caleb Paul Johnson Lot 11 Block 1 Phase 3 of Clairmont City of Weatherford, Parker County, Texas As Lot 11 Old Authon Road 76088 Sales Price: $269,000 Purchaser: Stephanie Fishburn and Steven Fishburn About Kairos Homes Kairos Homes, L.L.C. -- http://www.kairoshomesllc.com/-- is a home builder in Fort Worth, Texas. Kairos Homes filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 18-43969) on Oct. 3, 2018. In the petition signed by Brian Frazier, president, the Debtor disclosed $3,006,914 in assets and $1,116,717 in liabilities. The Hon. Mark X. Mullin oversees the case. John Park Davis, Esq., at Davis Law Firm, serves as bankruptcy counsel to the Debtor. KJM CAPITAL: Taps Robert Frezza of Ankura Consulting as CRO ----------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida approved the application jointly filed by KJM Capital Transportation Fund, LLC and its secured creditor Santander Bank, N.A. to hire Robert Frezza, senior managing director of Ankura Consulting Group, LLC, as chief restructuring officer. Mr. Frezza will facilitate an orderly wind-down of the operations of KJM and its affiliates by completing outstanding orders and deliveries to their customers and by assembling their assets for turnover to secured creditors, including Santander. The CRO will be paid a weekly flat fee of $38,000. The hourly rates for other personnel of the firm range from $495 to $650. Mr. Frezza maintains an office at: Robert J. Frezza Ankura Consulting Group, LLC 485 Lexington Avenue, 10th Floor New York, NY Phone: 212-818-1555 Fax: 212-818-1551 Email: bob.frezza@ankura.com About KJM Capital KJM Capital Transportation Fund, LLC, along with six affiliates which also operate in the general freight trucking business, sought Chapter 11 protection (Bankr. M.D. Fla. Lead Case No. 19-06302) on Sept. 27, 2019. In the petition signed by Kenneth J. Meister, manager, KJM was estimated to have assets at $10 million to $50 million and liabilities within the same range. Judge Cynthia C. Jackson oversees the cases. Shuker & Dorris, P.A. is the Debtors' legal counsel. KRS GLOBAL: Gets Interim Court Nod to Use Cash Collateral --------------------------------------------------------- Judge Mindy A. Mora authorized KRS Global Biotechnology, Inc., to use collateral on an interim basis. The Court ruled that: (a) to the extent that as of the Petition Date neither SummitBridge National Investments VII LLC, William Brown nor National Funding Inc., has a lien in the Debtor's cash, accounts, inventory, or raw materials, the Debtor is permitted to use said assets without providing adequate protection. SummitBridge, William Brown, and National Funding claim security interests in the Debtor's assets. The Debtor does not dispute the liens of SummitBridge, but disputes those of Brown and National. (b) the Debtor is prohibited from using cash proceeds generated from supplies in Debtor's possession that are subject to the lien, pending further Court order. (c) at least seven calendar days prior to the continued hearing on use of cash collateral, the Debtor is directed to provide SummitBridge an updated computer inventory showing the amount and value of the supplies. The Debtor is directed to segregate all cash proceeds generated from the supplies, pending further Court order. (d) SummitBridge is entitled to and will be granted security interests and liens on all of the Debtor's assets to secure any diminution in value of its valid, enforceable and non-avoidable interest in the pre-petition collateral from and after the Petition Date. A further hearing on the motion is scheduled on March 3, 2020, at 1:30 p.m. About KRS Global Biotechnology KRS Global Biotechnology, Inc. -- http://krsbio.com/-- owns and operates a human outsourcing facility that provides sterile and non-sterile compounding services to patients, surgery centers, ophthalmology clinics, hospitals, and universities. It is registered with the U.S. Food and Drug Administration as a DEA manufacturer and holds State Board of Pharmacy licenses both in-state and out-of- state. Based in Boca Raton, Fla., KRS Global Biotechnology filed a voluntary Chapter 11 petition (Bankr. S.D. Fla. Case No. 20-10350) on Jan. 10, 2020. At the time of filing, the Debtor estimated $50,000 in assets and $10 million to $50 million in liabilities. Judge Mindy A. Mora oversees the case. Malinda L. Hayes, Esq., at Markarian & Hayes, is the Debtor's legal counsel. KRS GLOBAL: Seeks Free and Unencumbered Use of Cash Collateral -------------------------------------------------------------- KRS Global Biotechnology, Inc., asks the Bankruptcy Court to approve use of cash collateral and to determine the extent of certain creditors' interest in said cash collateral. As of the Petition Date, the Debtor has a deposit account at Branch Banking & Trust with a balance of $2,020 and a deposit account at Bank of America with a balance of $30,100. The Debtor assert that the use of and access to these funds is essential to its on-going business operations. Creditor SummitBridge National Investments VII LLC, as successor-in-interest of Branch Banking and Trust, may claim a secured lien interest in the Debtor's accounts receivable by virtue certain UCC financing statements filed in 2019, 2018, and 2017. Summit claims that it is owed approximately $4.8M as BB&T's successor, and purports to have an interest in all of the Debtor's rights, title and interest in the Debtor's cash and deposit accounts. The budget provides for adequate protection payments to SummitBridge in the amount of the regular monthly payment on the debt, in the event that adequate protection is required. Moreover, (a) creditor William Brown may claim a secured lien interest in the Debtor's accounts, and (b) National Funding Inc., may claim a secured lien interest in the Debtor's cash accounts and accounts receivable, in both instances by virtue of UCC financing statements filed by or on behalf of the creditors. According to the Debtor, William Brown and National Funding have not taken steps to perfect an interest in the Debtor's cash or deposit accounts. The Debtor further contends that neither SummitBridge, nor any other creditor has a valid security interest in the Debtor's cash or deposit account because no creditor has perfected an interest in said cash or deposit accounts. By this motion, the Debtor proposes: (a) the free and unencumbered use of its cash, as no creditor holds a perfected lien interest in any cash held by the Debtor as of the Petition date; (b) offering as adequate protection to its secured creditors, replacement liens consistent with the extent, priority, and validity of such interests as were held on the Petition Date; (c) thereafter, to the extent the Court is inclined to constrain the use of cash collateral, approving the proposed budget on an interim basis for 90 days following the hearing on the motion. A copy of the motion is available for free at https://is.gd/2aeFZh from PacerMonitor.com. About KRS Global Biotechnology KRS Global Biotechnology, Inc. -- http://krsbio.com/-- owns and operates a human outsourcing facility that provides sterile and non-sterile compounding services to patients, surgery centers, ophthalmology clinics, hospitals, and universities. It is registered with the U.S. Food and Drug Administration as a DEA manufacturer and holds State Board of Pharmacy licenses both in-state and out-of- state. Based in Boca Raton, Fla., KRS Global Biotechnology filed a voluntary Chapter 11 petition (Bankr. S.D. Fla. Case No. 20-10350) on Jan. 10, 2020. At the time of filing, the Debtor estimated $50,000 in assets and $10 million to $50 million in liabilities. Judge Mindy A. Mora oversees the case. Malinda L. Hayes, Esq., at Markarian & Hayes, is the Debtor's legal counsel. LUXURY LIMOUSINE: Plan Hearing Resumes Today -------------------------------------------- Luxury Limousine Service, Inc., filed with the U.S. Bankruptcy Court for the Eastern District of Pennsylvania a motion for approval of Debtor's Chapter 11 Plan of Reorganization and Disclosure Statement along with a request for approval of plan voting procedures. On Jan. 21, 2020, Judge Jean K. Fitzsimon ordered that: * The hearing on the Motion is continued to February 12, 2020, at 12:30 p.m. in Courtroom #3, 900 Market Street, Philadelphia, Pennsylvania 19107. * All deadlines related to Debtor's filing of a Plan, Disclosure Statement, Confirmation, and Debtor's exclusive right to file plan and disclosure statement are extended through February 12, 2020. A copy of the order dated January 21, 2020, is available at https://tinyurl.com/st66tok from PacerMonitor.com at no charge. About Luxury Limousine Service Luxury Limousine Service, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Pa. Case No. 18-13574) on May 31, 2018. In the petition signed by Perry Camerlengo, president, the Debtor was estimated to have assets of less than $1 million and liabilities of less than $1 million. The Debtor tapped Bottiglieri Law, LLC, as its legal counsel. MILLMAC CORPORATION: Has Until April 16 to File Plan & Disclosures ------------------------------------------------------------------ On Jan. 15, 2020, the U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, conducted a status conference for the overall status of Debtor Millmac Corporation. On Jan. 21, 2020, Judge Michael G. Williamson ordered that: * The Debtor will file a Plan and Disclosure Statement on or before April 16, 2020. * Pursuant to Section 105(d)(2)(B)(vi) of the Bankruptcy Code, the hearing on the approval of the Disclosure Statement shall be consolidated with the hearing on the confirmation of the Plan. A copy of the order dated Jan. 21, 2020, is available at https://tinyurl.com/wnohmj5 from PacerMonitor.com at no charge. About Millmac Corporation Millmac Corporation is a provider of specialized marine labor, ship repair and dredging for industrial and residential uses. Based in Bartow, Fla., Millmac Corporation filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 19-11877) on Dec. 18, 2019. In the petition signed by Michael J. Miller, president, the Debtor disclosed $1,308,639 in assets and $1,619,039 in liabilities. Susan Heath Sharp, Esq., at Stichter, Riedel, Blain & Postler, P.A., is the Debtor's legal counsel. MONTICELLO PIZZA: Gets Cash Access on Final Basis Thru June 30 -------------------------------------------------------------- Judge Kathleen H. Sanberg authorized Monticello Pizza Co., LLC to use cash collateral from January 15, 20220 to June 30, 2020 on a final basis, pursuant to the approved budget of each store location in Monticello, Elk River and Champlin, in Minnesota. The Debtor is authorized to grant replacement liens to Marlin Leasing Corporation, Pawnee Leasing Corporation, OnDeck Capital, Inc., and Stearns Bank, N.A. on all assets of the Debtor to the extent of use of cash collateral. A copy of the final order, with the budget for each store, is available at https://is.gd/AAGin1 from PacerMonitor.com free of charge. About Monticello Pizza Monticello Pizza Co., LLC, which conducts business under the name Little Caesars, sought Chapter 11 protection (Bankr. D. Minn. Case No. 19-43750) on Dec. 16, 2019. At the time of the filing, the Debtor disclosed assets of between $500,001 and $1 million and liabilities of the same range. Judge Kathleen H. Sanberg oversees the case. Steven B. Nosek, P.A., is the Debtor's legal counsel. NATIONAL QUARRY: Bankr. Administrator Unable to Appoint Committee ----------------------------------------------------------------- The U.S. Bankruptcy Administrator for the Middle District of North Carolina on Feb. 6 disclosed in a filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of NQS Equipment Leasing Company, an affiliate of National Quarry Services, Inc. About National Quarry Services and NQS Equipment Leasing Co. National Quarry Services, Inc. -- https://nationalquarryservice.com/ -- is a full-service rock drilling and blasting company. National Quarry Services and its affiliate NQS Equipment Leasing Company sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D.N.C. Lead Case No. 20-50070) on Jan. 23, 2020. At the time of the filing, the Debtors each had estimated assets of between $1 million and $10 million and liabilities of between $10 million and $50 million. Judge Benjamin A. Kahn oversees the cases. The Debtors tapped James C. Lanik, Esq., at Waldrep, LLP, as their legal counsel. NICK'S PIZZA: Seeks Authority to Use Cash Collateral ---------------------------------------------------- Nick's Pizza & Pub, Ltd., asks the Bankruptcy Court to authorize use of cash collateral, pursuant to the budget, in order to continue its operations as a going-concern and to preserve approximately 203 jobs for its employees. The budget from the week from Feb. 5 to Feb. 11, 2019 provides for $63,767 in total operating disbursements, including $18,079 in cost of goods sold and $24,105 in payroll and payroll expenses. The Debtor proposes to grant replacement liens to Rewards Network Establishment Services, Inc., St. Charles Bank & Trust, successor by merger with First Community Bank, SCB&T and U.S. Foodservice Inc., for the use of cash collateral to the extent of the diminution in the value of their interests pre-petition. Rewards Network Establishment asserts a lien on substantially all the Debtor's assets existing as of the Petition Date. SCB&T (pursuant to several loans to the Debtor) and U.S. Foods may assert liens on the Debtor's assets. However, the Debtor believes that the claims held by SCB&T and U.S. Foods have not attached to the Debtor's property and assets as required by the Illinois Uniform Commercial Code. A copy of the motion is available at https://is.gd/KHxPhN from PacerMonitor.com at no charg. Hearing on the motion is scheduled for February 20, 2020 at 10 a.m. About Nick's Pizza & Pub, Ltd. Nick's Pizza & Pub, Ltd., operates two family restaurants, one located in Crystal Lake, Illinois opened in 1995, and another in Elgin, Illinois since 2005. The company sought Chapter 11 petition (Bankr. N.D. Illi. Case No. 20-00551) on January 7, 2020. Gensburg Calandriello & Kanter, P.C., represents the Debtor as counsel. The firm may be reached through: E. Philip Groben 200 West Adams St., Ste. 2425 Chicago, Illinois 60606 Phone: 312-263-2200 Fax: 312-263-2242 Email: pgroben@gcklegal.com NICK'S PIZZA: Stipulates with On Deck Capital on Collateral Use --------------------------------------------------------------- Nick's Pizza & Pub, Ltd., entered into a stipulation with On Deck Capital, Inc., pursuant to which On Deck consents to the Debtor's use of assets which secure On Deck Capital's interest in the Debtor, specifically in the cash collateral. The Debtor owes On Deck Capital under a business loan with a current amount of $91,665.10, which according to the document, appears to be secured and with a continuing security interest superior to all other creditors’ security interest in and to any and all collateral owned by Debtor. Pursuant to the stipulation: (a) The term "secured assets" of Debtor includes all of the inventory, furniture, fixtures, equipment, accounts receivable from the sale of any inventory, any cash, funds in any bank and any other cash equivalents, or cash collateral. (b) The Debtor may use the cash collateral and the secured assets for the preservation and operation of its business, and to pay the Debtor's reasonable, necessary and ordinary costs and expenses incurred in its business operations, without further Court order or approval by On Deck. (c) As adequate protection for Debtor's use of the cash collateral and secured assets, Debtor will grant On Deck a valid, enforceable, and perfected replacement liens on and in, any and all of Debtor's rights, title, and interest in and to all of its property, and interests in property, including (i) the pre-petition collateral, (ii) all cash on hand and cash accumulated on a post-petition basis, (iii) any property, existing on the Petition Date, (iv) any and all property or assets acquired or arising after the Petition Date, including accounts receivables and billing rights to any work in progress, and (v) all profits, interest, proceeds, products, issues, rents and profits thereof, and accessions, accessories, and improvements of or to the property or assets described above, and replacement thereof. (d) Notwithstanding any restriction on the use of cash collateral, On Deck specifically approved payments to the United States Trustee for quarterly fees and professional fees following approval by the Court. The parties further stipulate that the Debtor's right to use the cash collateral will automatically cease and terminate on the earliest occurrence of: * entry of an order confirming any Chapter 11 Plan in the Debtor's Chapter 11 case, provided, however, that the payment term of this agreement will be incorporated into the Chapter 11 Plan, or * entry of an order converting, for any reason, the Debtor's case to a case under a different Chapter of the Bankruptcy Code. A copy of the stipulation is available for free at https://is.gd/bZMIpv from PacerMonitor.com. About Nick's Pizza & Pub Nick's Pizza & Pub, Ltd., operates two family restaurants, one located in Crystal Lake, Illinois operating since 1995, and another in Elgin, Illinois operating since 2005. The company sought Chapter 11 petition (Bankr. N.D. Illi. Case No. 20-00551) on Jan. 7, 2020. Gensburg Calandriello & Kanter, P.C., is the Debtor's legal counsel. The firm may be reached through: E. Philip Groben 200 West Adams St., Ste. 2425 Chicago, Illinois 60606 Tel: 312-263-2200 Fax: 312-263-2242 E-mail: pgroben@gcklegal.com O'LINN SECURITY: May Use Cash Collateral Thru June 30 ----------------------------------------------------- Judge Scott C. Clarkson authorized O'Linn Security Incorporated to use cash collateral on an interim basis from January 1, 2020 through June 30, 2020, pursuant to the terms contained in the stipulation between the Debtor and Pacific Premier Bank. About O'Linn Security O'Linn Security Incorporated sought Chapter 11 protection (Bankr. C.D. Cal. Case No. 19-17085) on Aug. 13, 2019, estimating both assets and liabilities of less than $1 million. The case is assigned to Judge Scott C. Clarkson. Steven R. Fox, Esq., and W. Sloan Youkstetter, Esq., at The Fox Law Corporation, Inc., serve as the Debtor's counsel. PERSPECTA INC: Fitch Lowers LongTerm IDR to 'BB', Outlook Stable ---------------------------------------------------------------- Fitch Ratings downgraded Perspecta Inc.'s Long-Term Issuer Default Rating to 'BB' from 'BB+'. Additionally, Fitch has downgraded Perspecta's issue ratings by one notch to 'BB+'/'RR1' from 'BBB-'/'RR1'. The Rating Outlook is Stable. The rating action follows the Feb. 5, 2020 announcement that the United States Navy has awarded the eight-year, $7.7 billion services portion of its Next Generation Enterprise Network-Recompete contract to Leidos. The contract is Perspecta's largest (~15% to 20% of revenue, by Fitch's estimate.) Perspecta's equity value declined by nearly 20% following the news. The loss materially impacts Perspecta's financial profile and credit protection metrics, albeit mainly in fiscal 2022 and beyond. This is combined with the fact that Perspecta ended fiscal 2019 with a debt balance $236 million, higher than Fitch expected and subsequently drew $175 million on its revolver (in conjunction with a $265 million acquisition). Additionally, absent the NGEN contract loss Fitch expects the company's margins to decline structurally (100bps and 150bps in fiscal years 2021 and 2022, respectively) due to lower capital intensity in its contracts. While Perspecta's financial profile could have accommodated these changes previously, the headroom is greatly, if not completely, reduced as a result of such a significant contract loss. Therefore, Fitch now expect gross leverage to remain at or around 4x over the forecast horizon, still contingent on an anticipated approximately $100 million-$150 million in voluntary debt repayment. The company does have flexibility in the form of Fitch-assumed share repurchases. However, by the company's calculation, it is close to its 3x net leverage target at present, although this would change in the fiscal 2022 should it not be able to replace lost NGEN revenue. Additionally, there is a chance the company protests the contract although the likelihood of success is low. Fitch views the incumbency loss as potentially reflective of increased competitive pressure in a consolidating market that may threaten Perspecta's other contracts, although this is uncertain and none of Perspecta's remaining contracts are as large as NGEN. According to Fitch, this together with the reduced financial flexibility warrants a one notch change in Perspecta's IDR and associated issue ratings. KEY RATING DRIVERS Business Diversity & Competitiveness: As a combined entity with IT and mission services, Perspecta's operating profile should continue benefit from balanced agency and contract exposure and a favorable contract mix that both reduces risk and expands the overall opportunity set. However, the loss of its largest contract, as an incumbent, does not bode well for the company's prospects and could be reflective of competitive dynamics that are seeing consolidating players being more successful at winning away existing business. Margin & FCF Profile: Perspecta's pro forma operating EBITDA margin for the LTM period ended September 30, 2019 was approximately 17.7%, more than five points higher than the average of other major government services providers. This is a result of a prospective contract mix that is more than 50% fixed price, which tends to be higher margin. However, Fitch expects Perspecta's margin profile to weaken by one to two points over time as the capital intensity of its contracts reduces. In conjunction with the loss of NGEN, Fitch now expects Perspecta will generate FCF (post-dividend) margins of 5% to 6%, while strong relative to its IT and mission services peers and supportive of its overall liquidity position and ability to make discretionary debt repayments, is lower than Fitch's previous expectation. Leverage and Financial Policy: Fitch now expects Perspecta will maintain its gross leverage at or above 4x over the ratings horizon as a result of its contract loss, margin compression due to less capital intensive contracts and reduced capacity for voluntary debt repayment. The company has targeted a net leverage ratio (on a credit agreement basis) of 3x over the long run, although in August it revised its stepdown up to 4.25x from 3.75x 12 after 12 months and thereafter with a step-up to 4.50x from 4.00x for a 12-month period following a Permitted Acquisition greater than $100 million. Perspecta could reduce leverage by achieving growth rates higher than the low single digit Fitch assumes and/or by directing cash flow earmarked for shareholder return to debt repayment. Fitch believes achieving higher revenue growth could be challenged if Perspecta's incumbency loss indicates its competitive position is weakened. Additionally, given the impact of the company's contract loss on its equity price (approximately 20%) Fitch does not believe the company will be able to lessen shareholder return or M&A given the potential need to replace lost NGEN business. Government Budget Tailwinds: Government IT spend overall is still expected to grow low single digits over the ratings horizon and roughly double that at state and local levels, providing a tailwind to Perspecta's business. Fitch expects high single-digit growth in key digital areas including cloud, cybersecurity, and analytics to support growth. Additionally, mid-single-growth in the defense budget and low double-digit growth in the intelligence budget should support mission-oriented work. This should serve to offset challenges in some civilian agencies. DERIVATION SUMMARY Perspecta is an IT and mission services provider with similar scale and scope to former standalone competitor CSRA. However, Perspecta's relatively weaker prospective credit protection metrics at the time of its formation corresponded to a lower rating category. CSRA was acquired by General Dynamics Corporation, which has substantially greater scale, business diversity, and financial resources. Perspecta's margin profile compares favorably with other U.S. government IT and mission services providers including Science Applications International Corporation, Booz Allen Hamilton Holding Corporation and CAIC due to its favorable contract mix with a materially higher balance of fixed-price contracts. Perspecta is of smaller scale than Leidos, similar in size to SAIC, and Booz Allen, and larger than CAIC. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Low single-digit revenue growth annually over the forecast period; - Mid-teen operating EBITDA margins sustained over the forecast; - $50 million dividend growing 10% annually; $50 million to $100 million in stock repurchases annually; - Discretionary debt repayment to keep cash balance at approximately $100 million. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - Total debt with equity credit to operating EBITDA expected to be sustained below 4x; - Sustained mid-single digit revenue growth; - FCF margin sustained above 3%. Developments That May, Individually or Collectively, Lead to Negative Rating Action - Total debt with equity credit to operating EBITDA expected to be sustained above 4.5x; - FCF margin sustained below 1%; - Loss of another significant contract. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Perspecta had $122 million of cash and cash equivalents as of Sept. 30, 2019. The company also had access to an undrawn $750 million (upsized from $600 million) revolving credit facility that expires May 31, 2025. Fitch's expectation of $200 million to $300 million in annual post-dividend FCF over the forecast horizon also supports Perspecta's liquidity position. Manageable Debt Structure: Perspecta's maturities are staggered with TLA1 due 2023, TLA2 due 2025 and TLB due 2025. TLA2 and TLB amortization is $82.5 million and $5.0 million annually, respectively. Additionally, $66 million in principal outstanding of legacy Enterprise Services LLC 7.45% notes are due 2029. The notes bear a guarantee of any principal and interest by HP Inc. (BBB+) as successor to Hewlett-Packard Company, which provided an irrevocable guarantee in 2008 upon its acquisition of Electronic Data Systems, LLC. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of 3 - ESG issues are credit neutral or have only minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. PHM NETHERLANDS: S&P Alters Outlook to Neg., Affirms 'B' ICR ------------------------------------------------------------ S&P Global Ratings affirmed its 'B' issuer credit rating on U.S.-based release liner manufacturer PHM Netherlands Midco B.V. and revised its outlook to negative from stable. PHM, owner of Loparex International B.V., is merging with Germany-based Infiana Group Gmbh, a specialty film-based release liner and engineered film manufacturer. The transaction will be funded by a new $207 million equivalent euro senior secured first-lien term loan and $45 million holding company payment-in-kind (PIK) loan. S&P assigned its 'B' issue-level rating and '3' recovery rating to the proposed $207 million senior secured first-lien term loan. The PIK loan will not be rated. "We are revising our business risk assessment and our outlook on PHM. Our more favorable assessment of the business risk as fair (revised from weak) reflects PHM's wider geographical footprint, improved market diversity, and reduced customer concentration with a wider customer base. However, this improvement is from a debt-financed merger that raised leverage (pro forma 2019 leverage above 8x), which if sustained would cause us to lower the rating," S&P said. PHM Netherlands is a market leader in release liners, with an estimated global market share of 18%. The combination of PHM's 13% global market share and Infiana's 5% creates a global market leader with pro forma revenues of about $720 million. This is smaller than other rated forest products and paper companies, but the largest within the release liner segment. The company receives about 56% of pro forma revenues from North America; 29% from Europe, the Middle East, and Africa (EMEA); and 15% from Asia-Pacific (APAC). For a relatively small company among rated forest products and paper companies, PHM has considerable geographic diversity, with manufacturing facilities in the U.S., Europe, and Asia, and a revenue base spread across six continents. The negative outlook reflects higher initial pro forma leverage (above 8x from about 6.5x at the end of 2018). S&P expects operational performance to improve in 2020 with the acquisition and for leverage to improve to about 6.5x in 2020, as some one-time charges in 2019 roll off and margins improve with the implementation of synergies. However, as with most mergers and acquisitions, there is a risk the company would not deleverage as fast as S&P expects in its base-case scenario. "We could downgrade the company within the next year if adverse market or macroeconomic events reduce EBITDA margins at least 300 basis points (bps) from our forecast or the owners undertake further aggressive debt-financed acquisitions or dividends that keep leverage above 8x. We could also downgrade the company if EBITDA interest coverage falls to less than 1.5x," S&P said. "We could revise our outlook back to stable if the company performs either in line with or better than our base-case forecast, such that leverage declines and stays below 7x," the rating agency said. PIONEER HOLDING: Moody's Withdraws B3 CFR on Sec. Notes Repayment ----------------------------------------------------------------- Moody's Investors Service withdrew Pioneer Holding LLC's corporate family rating of B3 and probability of default rating of B3-PD. At the time of withdrawal, there was no instrument rating outstanding. Prior to the withdrawal the outlook on the ratings was stable. RATINGS RATIONALE Moody's has withdrawn the ratings following the recent repayment of its senior secured notes on completion of the merger of Pioneer Holding LLC and Wesco Aircraft Hardware Corp. (B2 stable). PIXELLE SPECIALTY: Moody's Raises CFR to B1, Outlook Stable ----------------------------------------------------------- Moody's Investors Service upgraded Pixelle Specialty Solutions LLC's Corporate Family Rating to B1 from B2 and the Probability of Default rating to B1-PD from B2-PD. Moody's also upgraded the Senior Secured Term Loan and Revolving Credit Facility of Pixelle to B1 from B2. The outlook is stable. The upgrade concludes the review intiated on January 15 due to the pending acquisition of two specialty paper mills from Verso Corporation (unrated) for $400 million, including the assumption of a $35 million pension liability. The transaction is credit positive because it improves Pixelle's operational diversity, increases its vertical integration into pulp, and adds new specialty products and end markets. Credit metrics will remain strong, even after the issuance of additional debt. Pixelle financed the acquisition with approximately $50 million of cash, about $80 million of cash equity contribution from the sponsor (Lindsay Goldberg), and a $255 million incremental term loan. Verso shareholders approved the sale of the mills to Pixelle on January 31 and the transaction closed on February 10. Upgrades: Issuer: Pixelle Specialty Solutions LLC Probability of Default Rating, Upgraded to B1-PD from B2-PD Corporate Family Rating, Upgraded to B1 from B2 Senior Secured Term Loan, Upgraded to B1 (LGD4) from B2 (LGD4) Senior Secured Revolving Credit Facility, Upgraded to B1 (LGD4) from B2 (LGD4) Outlook Actions: Issuer: Pixelle Specialty Solutions LLC Outlook, Changed To Stable From Rating Under Review RATINGS RATIONALE The B1 CFR reflects Pixelle's improved scale and operational diversity with strong credit metrics, tempered by exposure to the graphic paper market which is in secular decline and is facing renewed pricing pressures. The acquisition of two mills from Verso helps alleviate previous scale and diversity constraints by doubling operational diversity to four mills, increasing paper production to 1.4 million tons from 730 thousand tons, and increasing sales to almost $1.4 billion from $813 million on a 9/30/19 LTM basis. The credit profile also reflects strong credit metrics despite additional debt to fund the acquisition with debt/EBITDA as adjusted by Moody's rising to 3.2x in the twelve months ended September 30, 2019, from 2.2x. The company's rating is constrained by exposure to commodity graphic paper, integration risk and lower margins at the acquired mill, as well as event risk associated with private equity ownership. The rating is supported by the company's leading position in a number of niche markets with above GDP growth rates such as high speed inkjet paper, engineered products, and now release papers and thermal labels. Other positive credit factors include its vertically integrated operations (option to become 100% self-sufficient in pulp after the acquisition) and projected strong free cash flow generation. Pixelle holds leading market positions in a number of niche segments, such as greeting card, high speed inkjet paper and carbonless. After the acquisition, the company will expand its specialty portfolio with leading positions in areas such as release papers and thermal labels. Moody's expects Pixelle Specialty Solutions to have good liquidity over the next 12-18 months to support operations. The company is not expected to have significant amount of cash on hand, pro forma for the acquisition, but Moody's expects it to generate free cash flow in 2020. Moody's expects that the company's $60 million (increased from $40 million) revolving credit facility due in 2023 will remain undrawn at the close of the transaction. Annual amortization is 2.5% in 2020, stepping up to 5% in each year thereafter, which can be covered from the projected free cash flow. The term loan facility includes a free cash flow sweep. The credit agreement includes a total net leverage ratio covenant of 4.25x, stepping down to 4.00x in March of 2020 and 3.75x in March of 2021. Moody's expects the company to maintain significant headroom under the covenant. All assets are encumbered by the credit facilities leaving no sources of alternative liquidity. The stable outlook reflects its expectations that the company will execute the integration of the acquired mills, improve their profitability and maintain strong credit metrics. Moody's could upgrade the rating if the company continues to grow and increase operational diversity and improves EBITDA margins to above 15% on a sustained basis while still maintaining strong credit metrics; with debt/EBITDA sustained below 3.0x, (retained cash flow - capex)/debt above 10%, and continued good liquidity. Moody's could downgrade the rating with expectations for adjusted financial leverage sustained above 4.0x, negative free cash flow, or a substantive deterioration in liquidity. Further, distributions to the sponsor or step-out acquisitions could be viewed as credit negative. Domiciled in Spring Grove, Pennsylvania, Pixelle Specialty Solutions LLC is a manufacturer of high speed inkjet papers, carbonless, trade book papers and envelopes. The company is the former specialty paper division of P.H. Glatfelter, which was acquired by Lindsay Goldberg. Pro forma for the Verso transaction, the company generated revenue of $1.4 billion in the twelve months ended September 30, 2019. The principal methodology used in these ratings was Paper and Forest Products Industry published in October 2018. PROMENADE ON FIFTH: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------------ The U.S. Trustee, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of Promenade on Fifth LLC, according to court dockets. About Promenade on Fifth Founded on May 8, 2017, Promenade on Fifth, LLC is a holding company focused on developing a lot located at 599 River Point Drive, Naples, Fla., which is the company's principal asset. Promenade on Fifth sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-11894) on Dec. 18, 2019. At the time of the filing, the Debtor disclosed assets of between $10 million and $50 million and liabilities of the same range. Judge Caryl E. Delano oversees the case. The Debtor tapped Dal Lago Law as its legal counsel. PUERTO RICO: GO and PBA Bondholders Accept 30% Haircuts ------------------------------------------------------- The Lawful Constitutional Debt Coalition (the "LCDC"), which includes certain major holders of Puerto Rico's General Obligation ("GO") and Public Buildings Authority ("PBA") bonds, on Feb. 10 disclosed that it has agreed to a global settlement (the "Settlement") with the Financial Oversight and Management Board (the "Oversight Board") and other holders of GO and PBA bonds. The compromise, which builds upon the proposed September 2019 plan of adjustment ("POA") anchored by the LCDC and other creditors, enjoys substantially broader support. The forthcoming amended POA will enable Puerto Rico to consensually restructure approximately $35 billion of outstanding liabilities. Matt Rodrigue of Miller Buckfire & Co., in his capacity as the LCDC's financial advisor, commented: "This agreement among a cross-section of major creditors and the Oversight Board represents a significant step forward for Puerto Rico on its path to exiting bankruptcy on sound financial footing. In addition to reducing the Commonwealth's outstanding debt by approximately $24 billion, the Settlement shortens the timeline for debt repayment by ten years and places a cap on annual debt service, which will keep payments at or below 9.16% of government revenues. This deal also does not touch federal funds or monies going to pensioners and mitigates the risk of protracted litigation that could have cost the Commonwealth hundreds of millions of dollars per year in restructuring-related expenses. It is important to highlight that creditors with long-term investments and interests in Puerto Rico have been willing to make meaningful compromises that will ultimately help restore capital formation and ignite economic activity on the island. Under the terms of the agreement, GO and PBA creditors will accept material haircuts that average 30%. These concessions anchor the consensual restructuring of more than $35 billion in outstanding debt and set the stage for Puerto Rico to experience the type of economic revitalization that other municipal issuers such as Detroit realized following their bankruptcies." A summary of the key terms provided under the Settlement include: * The Commonwealth's outstanding bond debt will be reduced from approximately $35 billion to approximately $11 billion, resulting in a total reduction of approximately $24 billion; * The timeline for debt repayment will be reduced by ten years compared with the prior POA; Commonwealth retains last ten years of cash flow totaling $4.8 billion; * Creates a cap on all payments for tax-supported debt of 9.16% of Puerto Rico's government revenues; * Provides for average haircuts for GO and PBA bondholders of approximately 30%; * Does not interfere with the level of government expenditures for essential services or pensions; * Leaves approximately $15 billion in cash for the Commonwealth and its entities. About the LCDC The LCDC consists of institutional holders of Puerto Rico's GO and PBA bonds. Quinn Emanuel Urquhart & Sullivan, LLP and Reichard & Escalera, LLC are serving as the LCDC's legal counsel, with Miller Buckfire & Co., a Stifel company, acting as the Coalition's financial advisor. About Puerto Rico Puerto Rico is a self-governing commonwealth in association with the United States that's facing a massive bond debt of $70 billion, a 68% debt-to-GDP ratio and negative economic growth in nine of the last 10 years. The Commonwealth of Puerto Rico has sought bankruptcy protection to restructure its massive $74 billion debt-load and $49 billion in pension obligations. The debt restructuring petition was filed by Puerto Rico's financial oversight board in U.S. District Court in Puerto Rico (Case No. 17-01578) on May 3, 2017, and was made under Title III of 2016's U.S. Congressional rescue law known as the Puerto Rico Oversight, Management, and Economic Stability Act ('PROMESA'). The Financial Oversight and Management Board later commenced Title III cases for the Puerto Rico Sales Tax Financing Corporation (COFINA) on May 5, 2017, and the Employees Retirement System (ERS) and the Puerto Rico Highways and Transportation Authority (HTA) on May 21, 2017. On July 2, 2017, a Title III case was commenced for the Puerto Rico Electric Power Authority ("PREPA"). U.S. Chief Justice John Roberts has appointed U.S. District Judge Laura Taylor Swain to oversee the Title III cases. The Honorable Judith Dein, a United States Magistrate Judge for the District of Massachusetts, has been designated to preside over matters that may be referred to her by Judge Swain, including discovery disputes, and management of other pretrial proceedings. Joint administration of the Title III cases, under Lead Case No. 17-3283, was granted on June 29, 2017. The Oversight Board has hired as advisors, Proskauer Rose LLP and O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic consultant, Citigroup Global Markets, as municipal investment banker, and Ernst & Young, as financial advisor. Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M. Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at O'Neill & Borges are on-board as attorneys. McKinsey & Co. is the Board's strategic consultant, Ernst & Young is the Board's financial advisor, and Citigroup Global Markets Inc. is the Board's municipal investment banker. Prime Clerk LLC is the claims and noticing agent. Prime Clerk maintains a case web site at https://cases.primeclerk.com/puertorico Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA, and PREPA. O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF), the agency responsible for negotiations with bondholders. The Oversight Board named Professor Nancy B. Rapoport as fee examiner and to chair a committee to review professionals' fees. Bondholders' Attorneys Kramer Levin Naftalis & Frankel LLP and Toro, Colon, Mullet, Rivera & Sifre, P.S.C. and serve as counsel to the Mutual Fund Group, comprised of mutual funds managed by Oppenheimer Funds, Inc., and the First Puerto Rico Family of Funds, which collectively hold over $4.4 billion of GO Bonds, COFINA Bonds, and other bonds issued by Puerto Rico and other instrumentalities. White & Case LLP and Lopez Sanchez & Pirillo LLC represent the UBS Family of Funds and the Puerto Rico Family of Funds, which hold $613.3 million in COFINA bonds. Paul, Weiss, Rifkind, Wharton & Garrison LLP, Robbins, Russell, Englert, Orseck, Untereiner & Sauber LLP, and Jimenez, Graffam & Lausell are co-counsel to the ad hoc group of General Obligation Bondholders, comprised of Aurelius Capital Management, LP, Autonomy Capital (Jersey) LP, FCO Advisors LP, and Monarch Alternative Capital LP. Quinn Emanuel Urquhart & Sullivan, LLP and Reichard & Escalera are co-counsel to the ad hoc coalition of holders of senior bonds issued by COFINA, comprised of at least 30 institutional holders, including Canyon Capital Advisors LLC and Varde Investment Partners, L.P. Correa Acevedo & Abesada Law Offices, P.S.C., is counsel to Canyon Capital Advisors, LLC, River Canyon Fund Management, LLC, Davidson Kempner Capital Management LP, OZ Management, LP, and OZ Management II LP (the QTCB Noteholder Group). Committees The U.S. Trustee formed an official committee of retirees and an official committee of unsecured creditors of the Commonwealth. The Retiree Committee tapped Jenner & Block LLP and Bennazar, Garcia & Milian, C.S.P., as its attorneys. The Creditors Committee tapped Paul Hastings LLP and O'Neill & Gilmore LLC as counsel. REAVANS ANNEX: Judge Denies Access to Thrive Cash Collateral ------------------------------------------------------------ Judge Harlin DeWayne Hale of the U.S. Bankruptcy Court for the Northern District of Texas denied Reavans Annex, LLC's Motion for Use of Cash Collateral. The Debtor sought permission from the Court to use the cash collateral of Thrive Lending Fund, LLC, offering to provide Thrive with post-petition liens, a priority claim in the Chapter 11 bankruptcy case, and cash flow payments as adequate protection. About Reavans Annex Reavans Annex, LLC and Reavans Lake Avenue, LLC classify their business as single asset real estate (as defined in 11 U.S.C. Section 101(51B). Meanwhile, Reavans Gilbert LLC is an investment company, including hedge fund or pooled investment vehicle (as defined in 15 U.S.C. Section 80a-3). Reavans Annex, Reavans Gilbert and Reavans Lake Avenue sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case Nos. 19-33704, 19-33705 and 19-33707) on Nov. 4, 2019. At the time of the filing, Reavans Annex had estimated assets of between $1 million and $10 million and liabilities of between $500,000 and $1 million. Reavans Gilbert had estimated assets of between $10 million and $50 million and liabilities of between $500,000 and $1 million. Reavans Lake had estimated assets of between $1 million and $10 million and liabilities of between $100,000 and $500,000. The cases have been assigned to Judge Harlin DeWayne Hale. The Debtors tapped Joyce W. Lindauer Attorney, PLLC as their legal counsel. REGIONAL SITE: Court Enters Third Interim Order to Use Cash ----------------------------------------------------------- Judge Lena Mansori James, pursuant to a third interim order, authorized Regional Site Solutions, Inc., to use cash collateral in the ordinary course of business, pursuant to the budget, through the earliest of: (i) the entry of a final order authorizing the use of cash collateral, or (ii) the entry of a further interim order authorizing the use of cash collateral, or (iii) January 22, 2020 or (iv) the entry of an order denying or modifying the use of cash collateral, or (v) the occurrence of a termination event. BB&T asserts a claim against the Debtor for $101,909.89 under a promissory note dated January 5, 2007 and subsequent modifications, and $249,617.78 under a promissory note dated September 12, 2011, both notes secured by interest in the Debtor's real property in Randolph County, North Carolina. The IRS contends the Debtor owes approximately $330,749.34. The Debtor discloses that it currently owes approximately $84,933.77 to the North Carolina Department of Revenue. The Debtor contends, however, the NCDOR misfiled tax lien notices with the Guilford County Clerk's office and as such they do not have an interest in cash collateral. Pursuant to the Court order, the secured parties are granted a post-petition replacement lien in Debtor's post-petition property of the same type securing the interest of the pre-petition secured parites, with such liens having the same validity, priority, and enforceability as existed as of the Petition Date. During the usage period, the Debtor will make monthly adequate protection payments to BB&T for $2,035.80 and to the IRS for $2,000 per month on the 15th non-holiday business day of each month thereafter until the confirmation of a reorganization plan. A copy of the interim order is available at https://is.gd/RmLPqG from PacerMonitor.com free of charge. About Regional Site Solutions Regional Site Solutions, Inc., is a privately held company that operates in the surfacing and paving business. Regional Site Solutions sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D.N.C. Case No. 19-11191) on Oct. 28, 2019. At the time of the filing, the Debtor was estimated to have assets of between $500,000 and $1 million and liabilities of between $1 million and $10 million. The case is assigned to Judge Lena M. James. Dirk W. Siegmund, Esq., at Ivey, McClellan, Gatton & Siegmund, LLP, is the Debtor's legal counsel. REVA MEDICAL: U.S. Trustee Bars Cash Order Release Provision ------------------------------------------------------------ In an objection filed with the Delaware Bankruptcy Court, Acting United States Trustee for Region 3 Andrew R. Vara asked the Court to deny the motion to use cash collateral filed by REVA Medical, Inc. The U.S. Trustee contended that the releases proposed by the Debtor in the interim order are only appropriate in a confirmed plan, if at all they are appropriate. A copy of the objection is available free of charge at https://is.gd/I2YWz9 from PacerMonitor.com. About REVA Medical REVA Medical, Inc. -- https://www.revamedical.com/ -- is a medical device company focused on the development and commercialization of bioresorbable polymer technologies for vascular applications. The Company's products include the Fantom Encore and MOTIV bioresorbable vascular scaffolds for the treatment of coronary artery disease and below-the-knee peripheral artery disease, respectively. REVA is currently selling Fantom Encore in Germany, Switzerland, Austria, the Netherlands, Belgium, Luxembourg, Italy and Turkey and is in the process of commercializing Fantom Encore in seven additional countries. REVA was founded in 2010 and is based in San Diego, California. REVA Medical filed a Chapter 11 petition (Bankr. D. Del. Case No. 20-10072) on Jan. 14, 2020. The Debtor disclosed total assets of $5.9 million and total debt of $104.5 million as of Jan. 13, 2020. The case is assigned to Hon. John T. Dorsey. The Debtor's counsel is Stuart M. Brown, Esq., of DLA PIPER LLP (US). REVA MEDICAL: Wins Cash Collateral Access Thru Feb. 29 ------------------------------------------------------ Judge John T. Dorsey authorized REVA Medical, Inc., to use cash collateral on an interim basis, pursuant to the budget, during the period from the Petition Date through the termination date, which is the earliest to occur of: (a) February 29, 2020; (b) the termination or non-consensual modification of the interim order; (c) the entry of an order terminating the Debtor's right to use cash collateral; (d) the dismissal of the Chapter 11 case or the conversion of the Chapter 11 case to one under Chapter 7 of the Bankruptcy Code; (e) the appointment of a trustee or an examiner with expanded powers; (f) the delivery of a termination date declaration by Goldhman Sachs International, the pre-petition administrative agent; (g) the first business day that is 28 business days after the Petition Date, if the final order has not been entered by the Court on or before said date; and (h) the consummation of the prepackaged Chapter 11 plan of REVA Medical, Inc., or an acceptable plan. Before the Petition Date, the pre-petition secured parties comprised of various lenders party thereto, and Goldman Sachs International, as administrative agent, collateral agent and lead arranger, extended to the Debtors certain loans under a senior secured credit facility. As of the Petition Date, approximately $9.7 million in principal amount plus accrued interest, costs and fees is outstanding under the said senior secured credit facility. Also prior to the Petition Date, pursuant to the second amendment to the credit and guarantee agreement among the Debtor, as borrower, Goldman Sachs, as administrative agent for the lenders, and Goldman Sachs Specialty Lending Group, L.P., as a new lender, the Debtor established two additional bank accounts (one bank account to constitute as the payroll account, while the other would receive proceeds of any future loans). The additional bank accounts constitute pre-petition collateral. The Court ruled that, the pre-petition secured parties will receive (a) adequate protection liens, (b) super-priority claims, and (c) adequate protection reservation (that receipt of the adequate protection will not be deemed an admission that the pre-petition secured parties' interests are adequately protected for) as adequate protection for any diminution in the value of their interests in the pre-petition collateral. As condition to the use of the cash collateral, the pre-petition secured parties require (a) the entry of a final order within 28 business days after the Petition Date, and (b) the occurrence of the effective date of a plan within 45 days after the Petition Date. A copy of the interim order is available for free at https://is.gd/xNVoLS from PacerMonitor.com. Final hearing is scheduled on February 18, 2020 at 1 p.m. prevailing Eastern Time. About REVA Medical REVA Medical, Inc. -- https://www.revamedical.com/ -- is a medical device company focused on the development and commercialization of bioresorbable polymer technologies for vascular applications. The Company's products include the Fantom Encore and MOTIV bioresorbable vascular scaffolds for the treatment of coronary artery disease and below-the-knee peripheral artery disease, respectively. REVA is currently selling Fantom Encore in Germany, Switzerland, Austria, the Netherlands, Belgium, Luxembourg, Italy and Turkey and is in the process of commercializing Fantom Encore in seven additional countries. REVA was founded in 2010 and is based in San Diego, California. REVA Medical filed a Chapter 11 petition (Bankr. D. Del. Case No. 20-10072) on Jan. 14, 2020. The Debtor disclosed total assets of $5.9 million and total debt of $104.5 million as of Jan. 13, 2020. The case is assigned to Hon. John T. Dorsey. The Debtor's counsel is Stuart M. Brown, Esq., of DLA PIPER LLP (US). RHC LLC: U.S. Trustee Unable to Appoint Committee ------------------------------------------------- The U.S. Trustee, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of RHC LLC, according to court dockets. About RHC LLC Founded on March 13, 2018, RHC, LLC, is a holding company engaged In real estate development, operations and ownership in Naples, Fla. It owns the real properties located at 1800 Snook Drive and 1660 Dolphin Court, Naples, Fla. RHC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-11853) on Dec. 17, 2019. At the time of the filing, the Debtor was estimated to have assets of between $1 million and $10 million and liabilities of the same range. The Debtor tapped Dal Lago Law as its legal counsel. S C BHAIRA INC: Wins Final OK on Cash Collateral Motion ------------------------------------------------------- The Bankruptcy Court for the Northern District of Texas authorized S C Bhairab, Inc., to use cash collateral on a final basis. The Court ruled that as adequate protection for the use of cash collateral and the imposition of the automatic stay, Regions Bank is granted a perfected replacement liens and security interests on the Debtor's post-petition properties of the kind and nature Regions holds pre-petition, in addition to all existing security interest and liens granted to or for the benefit of Regions Bank on the Debtor's pre-petition property. The Debtor owes Regions Bank under a $1,114,000 pre-petition business loan agreement for no less than $1,124,017.93 as of the Petition Date. As further adequate protection, the Debtor will pay to Regions Bank $5,000 on or before Feb. 1, 2020 and on the first of each month thereafter. Upon the occurrence of a termination event to the extent that there is not sufficient unencumbered assets to pay for fees owed to the Clerk of Court and the U.S. Trustee, as well fees and cost incurred by the Debtor's professionals, the replacement liens and security interests will be subject and subordinate to the payment of the aforementioned expenses, provided that (a) all accrued and unpaid fees, costs and expenses (accrued or incurred prior to the occurrence of a termination event) of professionals retained by the Debtor, do not exceed $15,000. A copy of the final order is available at https://is.gd/hZobNu from PacerMonitor.com at no charge. About S C Bhairab Inc. S C Bhairab, Inc. -- https://matlock-dry-clean-super-center.business.site -- is a provider of drycleaning and laundry services. Based in Arlington, Texas, S C Bhairab filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 19-45097) on Dec. 17, 2019. In the petition signed by Ram Gamal, president, the Debtor disclosed $1,403,335 in assets and $1,158,605 in liabilities. Robert M. Nicoud, Jr., Esq., at Nicoud Law, is the Debtor's legal counsel. SCIENCE APPLICATIONS: S&P Alters Outlook to Neg., Affirms BB+ ICR ----------------------------------------------------------------- S&P Global Ratings revised its outlook on Science Applications International Corp. (SAIC) to negative from stable and affirmed its 'BB+' issuer credit rating on the company. The rating actions follow SAIC's announcement that it is acquiring Unisys Federal from Unisys Corp. for $1.2 billion. The company plans to finance most of the purchase price with debt, which will significantly increase its leverage. Meanwhile, S&P affirmed its 'BB+' issue-level rating on the company's first-lien credit facility. This affirmation is based on S&P's understanding of the company's capital structure pro forma for the acquisition. The '3' recovery rating remains unchanged. The outlook revision reflects that SAIC's pro forma credit metrics will deteriorate at the close of the acquisition before gradually improving over the following 12-24 months. The company plans to use debt to fund most of the $1.2 billion transaction, which it expects will close by March. Pro forma for the transaction, S&P expects SAIC's debt to EBITDA to be about 4.5x. The rating agency anticipates that the company's revenue and earnings will increase due to the strong federal defense budget, its successful integration of Engility, and growth at Unisys. Given SAIC's modest working capital and capital expenditure needs, S&P expects the company to continue to generate strong cash flow, which it could use for additional debt repayment. The combination of earnings growth and debt repayment in excess of required amortization should reduce its debt to EBITDA to the 3.8x-4.2x range by the end of fiscal-year 2021 (ending January 2021) and to pre-acquisition levels of 2.8x-3.2x in fiscal year 2022. The negative outlook reflects SAIC's elevated leverage pro forma for the acquisition and S&P's expectation that the company's debt to EBITDA will remain high through fiscal year 2021. Despite an improvement in SAIC's earnings due to organic revenue growth and contributions from the company's acquisitions and S&P's expectation for voluntary debt repayment, the rating agency expects the company's debt to EBITDA to be about 4.5x as of the close of the transaction and between 3.8x and 4.2x as of the end of fiscal year 2021 before improving to near 3.0x in 2022. "We could lower our rating on SAIC if its leverage remains above 4x for the 12 months following the close of the transaction and we do not expect it to improve. This could occur if the company experiences integration problems or does not realize the expected growth in its new business. This could also occur if government spending declines, the company loses major contracts, or it undertakes a higher level of share repurchases or acquisitions than we expect," S&P said. "We could revise our outlook on SAIC to stable in the next 12 months if it appears likely that its debt to EBITDA will decrease below 4x and we expect it to remain there despite potential acquisitions or additional share repurchases. This could occur if the company successfully integrates Unisys Federal, recognizes organic growth, and repays debt in excess of its required amortization," the rating agency said. SCIENTIFIC GAMES: BlackRock Owns 6.8% of CL-A Shares as of Dec. 31 ------------------------------------------------------------------ BlackRock, Inc. disclosed in an amended Schedule 13G filed with the Securities and Exchange Commission that as of Dec. 31, 2019, it beneficially owns 6,349,013 shares of Class A common stock of Scientific Games Corporation, which represents 6.8 percent of the shares outstanding. A full-text copy of the regulatory filing is available for free at: https://is.gd/O3xTH5 About Scientific Games Based in Las Vegas, Nevada, Scientific Games Corporation (NASDAQ:SGMS) -- http://www.scientificgames.com/-- is a developer of technology-based products and services and associated content for the worldwide gaming, lottery, social and digital gaming industries. Its portfolio of revenue-generating activities primarily includes supplying gaming machines and game content, casino-management systems and table game products and services to licensed gaming entities; providing instant and draw-based lottery products, lottery systems and lottery content and services to lottery operators; providing social casino solutions to retail consumers and regulated gaming entities, as applicable; and providing a comprehensive suite of digital RMG and sports wagering solutions, distribution platforms, content, products and services. Scientific Games reported a net loss of $352.4 million for the year ended Dec. 31, 2018, compared to a net loss of $242.3 million for the year ended Dec. 31, 2017. As of Sept. 30, 2019, Scientific Games had $7.91 billion in total assets, $10.03 billion in total liabilities, and a total stockholders' deficit of $2.12 billion. SKY-SKAN INC: Cash Collateral Use Continued Through April 10 ------------------------------------------------------------ Judge Bruce A. Harwood of the U.S. Bankruptcy Court for the District of New Hampshire authorized Sky-Skan, Inc. to use cash collateral on a continuing basis through the week ending April 10, 2020, or until the date on which the Court enters an order revoking the Debtor's right to use cash collateral. The Debtor may use and expend up to $772,279 in cash collateral to pay the costs and expenses incurred by the Debtor in the ordinary course of business to the extent provided in the Budget. The Internal Revenue Service and Coastal Capital LLC are granted valid, binding, enforceable and automatically perfected liens, which liens continue to be valid and enforceable, on the Debtor's property acquired postpetition, excluding so-called Chapter 5 Claims, which liens will attach only to the same types of property and with the same validity, extent and priority as to which their respective liens existed prior to the Petition Date, notwithstanding the provisions of Section 552 of the Bankruptcy Code. As further adequate protection: (a) The IRS is granted a continuing post-petition security interest in all assets the Debtor. (b) The IRS, by and through its agents or representatives, will have access to and the right to inspect the Debtor's assets and properties. (c) The Debtor will permit the IRS to inspect, review and copy any financial records of the Debtor. These records will be made available at the Debtor's place of business. (d) Since February 2018 the Debtor has been paying into escrow at the Tamposi Law Group the monthly sum of $14,053.84. Payments have been made and will continue to be made on the 15th day of each month. Payments will continue each month thereafter until confirmation of the Debtor's Chapter 11 Plan or until further order of the Court. The funds will be applied to the secured debt of the IRS and/or Coastal and/or the Debtor's administrative creditors as their interests may ultimately be adjudicated and/or by agreement of the parties. (e) The Debtor will timely file all post-petition tax returns on the due date with the appropriate IRS office. (f) The Debtor will timely pay each federal tax deposit as it accrues (when payroll is made) by electronic transfer or through a federal depository payable to the Debtor's depository institution. (g) The Debtor will maintain all insurance policies including workers compensation, general liability, fire, and casualty. (h) The Debtor will provide to Coastal, the Official Committee of Unsecured Creditors and the IRS a weekly report of its current accounts receivable and cash positions as of Friday of every week. The Debtor is directed to file a further application for ongoing usage of cash collateral on or before March 23, 2020. Any objection to the application for ongoing use of cash collateral will be filed on or before April 1, 2020. The Court will hold a hearing on the application for ongoing use of cash collateral on April 8, 2020 at 2:00 p.m. A copy of the Order is available at PacerMonitor.com at https://is.gd/EQAL6I at no charge. About Sky-Skan Inc. Sky-Skan, Inc., was founded in 1967 as a company dedicated solely to the development and manufacture of specialized devices for depicting dynamic visualizations of astronomical and meteorological phenomena on planetarium domes in museums, schools, and universities. The company has since grown to become a provider of digital full dome science visualization, theater control, and show programming systems for hundreds of planetariums on six continents, serving hundreds of clients in the niche field of immersive science interpretation and education. From the initial planning stage to staff training and ongoing support, Sky-Skan provides all services required by the most advanced digital full-dome planetariums and visualization theaters. Sky-Skan, based in Nashua, NH, filed a Chapter 11 petition (Bankr. D.N.H. Case No. 17-11540) on Nov. 1, 2017. In the petition signed by Steven T. Savage, president, the Debtor was estimated to have less than $50,000 in assets and $1 million to $10 million in liabilities as of the bankruptcy filing. Peter N. Tamposi, Esq., at The Tamposi Law Group, P.C., serves as bankruptcy counsel to the Debtor, and SquareTail Advisors, LLC, is the financial advisor. The Office of the U.S. Trustee appointed an official committee of unsecured creditors on Dec. 1, 2017. The Committee retained William S. Gannon PLLC as its bankruptcy counsel. SOBEYS INC: S&P Affirms BB+ Issuer Credit Rating; Outlook Positive ------------------------------------------------------------------ S&P Global Ratings affirmed its 'BB+' issuer credit rating on Sobeys Inc. and revised its upgrade leverage threshold to the mid-3.0x area from 3.0x. As of May. 5, 2019, Sobeys adopted the revised International Financial Reporting Standards (IFRS) lease accounting standards (IFRS 16) requiring that off-balance-sheet lease obligations be capitalized on the balance sheet. The revision resulted in S&P Global Ratings' adjusted leverage increasing slightly to 4.2x from 3.5x as of Nov. 2, 2019, but has no effect on the underlying creditworthiness of Sobeys or the debt-level ratings. While the balance-sheet lease obligation is higher than the present value of the obligation that it has previously calculated, in S&P's view, nothing fundamental has changed in the company's underlying cash flow characteristics. The rating agency now expects that Sobeys will generate funds from operations to debt of 15%-20% through 2021. The positive outlook on Sobeys reflects S&P's increased confidence that the company will increase EBITDA as it continues to execute Project Sunrise while also integrating Farm Boy and expanding its discount store footprint. As a result, S&P expects the company to deleverage significantly below 4.0x over the next 12 months. "We could upgrade Sobeys in the next 12 months if the company continues to maintain its market share and invest in its business such that S&P Global Ratings' adjusted EBITDA margins improve above 6%, reflecting the success of Sobeys' various strategies. At the same time, we expect Sobeys to continue its deleveraging trend such that the company's adjusted debt-to-EBITDA is sustained at about the mid-3.0x area, a revision from our previous threshold of 3.0x," S&P said. "We could revise the outlook to stable over the next 12 months if we expect adjusted debt-to-EBITDA to remain near 4.0x (a revision from our previous threshold of mid-3.0x) or if the company's adjusted EBITDA margins start deteriorating. These situations could occur if same store sales decline, or profitability deteriorates from poor execution on Sobeys' growth plans or increased competition," the rating agency said. SOUTHERN INYO: Says Fourth Amended Plan Consensual -------------------------------------------------- Debtor Southern Inyo Healthcare District filed a Chapter 9 status report on Jan. 21, 2020. At the previous hearing, the Court continued both the Chapter 9 Status Conference and the Court's order to show cause regarding dismissal. At that hearing, the Court also set deadlines for Nov. 8, 2019, the date by which the District was to file its amended plan of adjustment of debts and disclosure statement. The District filed its Third Amended Plan and Disclosure Statement by this deadline. Only one objection to the adequacy of the disclosure statement was filed by Optum Bank, Inc. In responding to the Optum Objection, the District indicated that several settlements and agreements between the District and various creditors had been reached, and that a Fourth Amended Plan and Disclosure Statement would be filed. On Jan. 14, 2020, the District filed its Fourth Amended Plan and its Fourth Amended Disclosure Statement, which the District believes to be consensual as proposed. The District believes that the Fourth Amended Plan and Fourth Amended Disclosure Statement dispose of all issues raised by creditors of the District, including those raised in the Optum Objection, and as of the filing of this Status Report, no other creditors have filed an objection to the Fourth Amended Disclosure Statement. Since filing the Fourth Amended Disclosure Statement and Fourth Amended Plan, the District has agreed to modify the treatment of Class 1F, US Foods, Inc. with the approval of US Foods, as follows: * Class 1F – US Foods, Inc.: The current plan treatment is: in full satisfaction, release and discharge of the Class 1F Claim, US Foods will receive monthly payments in the approximate amount of $763.00 per month over 48 months, which equates to the full amount of the Claim plus interest at a rate of 1.5% per annum. * The treatment will now provide the following: US Foods’ claim will be discounted from $35,540 to $21,324 and will be paid in three (3) equal monthly installments following the Effective Date. * The District also believes it has identified another credible source of funds to be used for its plan involving revenue bonds. Neither of the changes described herein will have any negative or monetary impact on other creditors. US Foods is separately classified and the changes to their treatment will not change the District’s ability to make the plan payments to all other creditors. A full-text copy of the status report dated Jan. 21, 2020, is available at https://tinyurl.com/vt9zqsy from PacerMonitor.com at no charge. The Debtor is represented by: WEILAND GOLDEN GOODRICH LLP Jeffrey I. Golden Ryan W. Beall 650 Town Center Drive, Suite 600 Costa Mesa, California 92626 Telephone: 714-966-1000 Facsimile: 714-966-1002 E-mail: jgolden@wgllp.com rbeall@wgllp.com About Southern Inyo Healthcare District Southern Inyo Healthcare District is a special district formed under the California Local Healthcare District Law, Cal. Health and Safety Code Sec. 32000, et seq., located in Lone Pine, California. As of the commencement of its Chapter 9 Case, the District owned and operated three facilities -- namely, an emergency and acute care facility with four beds, a skilled nursing facility with 33 beds, and an out-patient medical clinic. Southern Inyo Healthcare District sought protection under Chapter 9 of the Bankruptcy Code (Bankr. E.D. Cal. Case No.16-10015) on Jan. 4, 2016. The petition was signed by Alan Germany, the CRO. At the time of the filing, Southern Inyo Healthcare District was estimated to have assets and debt of $1 million to $10 million. SOUTHWESTERN ENERGY: Fitch Alters Outlook on BB LT IDR to Negative ------------------------------------------------------------------ Fitch Ratings affirmed the Long-Term Issuer Default Rating of Southwestern Energy Company at 'BB'. Fitch has also affirmed the 'BBB-'/'RR1' rating for the senior secured revolving credit facility and the 'BB'/'RR4' rating for the senior unsecured notes. The Rating Outlook has been revised to Negative from Stable. The Negative Outlook reflects the impact of weak commodity prices that could drive the company's leverage profile outside of rating tolerances. Fitch realizes management's current hedge position mitigates near-term price risk and views the company's development shift towards liquids favorably as it helps to offset the impact of weaker natural gas prices. Fitch anticipates resolving the outlook within 12-18 months subject to management's ability to maintain forecasted leverage at around 3.0x and communicate a capital plan that supports FCF neutrality in 2021. Southwestern's ratings are supported by its growing production profile and liquids mix, favorable near-term hedging program which supports development funding, manageable midstream commitments and extended maturity profile. These factors are offset by the company's reduced post-2020 hedge coverage and continued development outspend that extends the expected FCF inflection point to 2021. KEY RATING DRIVERS Development Shift on Track: Management's use of the Fayetteville proceeds to support development in SW Appalachian has helped develop the asset base and improved the liquids mix. The asset base consists of approximately 297,000 net acres in the southwest Appalachia and 184,000 net acres in the northeast Appalachia with a proved reserves (33% liquids) life of approximately 12.6 years based on 3Q19 production. In 3Q19, condensate and total liquids production have increased 42% and 19% versus 3Q18, respectively, providing some offset to a weak natural gas price environment. Fitch believes the SW Appalachian acreage continues to deliver favorable operational results and believes development spending in its liquids-weighted region should help support netbacks. Hedges Provide Near-Term Support: Fitch sees near-term development spending supported by hedges, but prolonged weak commodity prices could result in leverage pressure beyond 2020. At 3Q19, the company has 60% of 2019F natural gas production hedged in 2020 at an average floor price of $2.63, dropping to 22% in 2021 with an average floor price of $2.55. Liquids hedges in 2020 included 7,750 bbl/d of oil production, 10,500 bbl/d of ethane production and 9,000 bbl/d of propane production at average floor prices of $58.48/bbl, $9.66/bbl and $25.62/bbl, respectively. Hedges in 2020 provide liquidity uplift and capacity for reinvestment to support the development plan. FCF Outspend Continues: Fitch forecasts continued FCF outspend in 2019 and 2020 before approaching FCF neutrality in 2021, assuming a base case Henry Hub price of $2.50/Mcf. Higher capex spending in 2020 is supported by proceeds from the Fayetteville divestiture in addition to the company's currently undrawn $2.0 billion revolver. Fitch expects elevated near-term leverage metrics under its base case and forecasts 2020 leverage at 2.9x. Fitch believes a prolonged weak commodity price environment could delay the anticipated 2021 transition to FCF neutral and elevate leverage metrics. Clear Maturity Profile: Southwestern's maturity schedule remains light with no material near-term debt maturities outside of the $213 million due March 2022. This maturity can be funded through the revolver providing that net leverage is below 3.0x. The company repurchased $50 million of existing notes in 3Q and successfully extended its revolver maturity date one year to April 2024 in October. Fitch believes the maturity profile supports management's development timeline and associated production growth should help moderate near-term pricing impacts on the borrowing base. DERIVATION SUMMARY Southwestern is one of the larger U.S. natural gas E&P companies at 2.2 Bcfe per day (Bcfe/d) in 3Q19 with significant acreage in the Northeast and Southwest Appalachia. Their size is most similar to Range Resources Corporation's (RRC; not rated [NR]) 2.2 Bcfe/d, larger than CNX Resources Corporation's (CNX; BB/Stable) 1.4 Bcfe/d, but smaller than Antero Resources Corporation (AR; BB-/Negative) and EQT Corporation (EQT; BBB-/Negative) at 3.4 Bcfe/d and 4.1 Bcfe/d, respectively, in the same period. Southwestern's liquids mix of 22% at 3Q19 is at the higher end of peers. This is slightly below AR and RRC at 32% and 30%, respectively, but higher than both CNX and EQT at 6% and 5%, respectively. Fitch expects increased liquids mix as the company continues to drill its liquids-rich SW Appalachian acreage. The company's Fitch-calculated unhedged cash netback margin of 13% at 3Q19 is similar to RRC and AR at 11% and 12%, respectively, but lower than CNX and EQT at 39% and 24%, respectively. The company's leverage profile is below the peer-average with debt/flowing barrel at 3Q19 of $5,945, lower than AR ($6,638), EQT ($7,504), RRC ($8,452) and CNX ($11,487). Standalone leverage also remains the lowest at 2.3x as of Sept. 30, 2019. Southwestern also enjoys an extended maturity profile with no material maturities until 2025, unlike AR, EQT and RRC that face significant maturity walls in an unfavorable capital market environment. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- WTI oil price of $57.50/bbl in 2020 and $55.00/bbl in the long term; -- Henry Hub natural gas price of $2.50/mcf through the forecast; -- Production of 2.1 Bcfe/d in 2019 with 2020 production benefiting from recent development spending, followed by modest growth thereafter; -- Liquids mix of 22% in 2019 and growing as the company focuses drilling on its liquids-rich acreage; -- Capex above $1.0 billion in 2019, followed by Fayetteville proceeds-linked outspend in 2020 and FCF neutral spending thereafter; -- Revolver borrowings used to fund cash shortfalls; -- No material M&A or shareholder activity. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Operational execution of Southwest Appalachia development plan; -- Mid-cycle debt/EBITDA below 2.5x or FFO adjusted leverage below 2.75x on a sustained basis; -- Demonstrated commitment to stated financial policy. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Mid-cycle debt/EBITDA above 3.0x or FFO adjusted leverage above 3.25x on a sustained basis; -- Operational and financial plan that fails to execute on Southwest Appalachia development and support FCF neutrality; -- Weakening in differential trends and the unit cost profile. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Southwestern's liquidity consists of $29 million cash on hand and full access to the $2.0 billion secured credit facility at 3Q19 (approximately $1.8 billion available as of Sept. 30, 2019 given $172 million in letters of credit). The borrowing base was reaffirmed in October and Fitch expects the company's recent production growth will offset pricing impacts on the borrowing base redetermination in April. Financial covenants under the credit facility include a minimum current ratio (including unused commitments under the credit agreement) of 1.0x and a maximum total net leverage ratio of no greater than 4.25x through March 31, 2020, stepping down to 4.00x on June 30, 2020. As of Sept. 30, 2019, Southwestern was in compliance with all of its covenants. Fitch believes the company has sufficient covenant headroom, but realizes that the leverage profile could be pressured in a prolonged weak commodity price environment. The company is able to pay down the $213 million maturity in 2022 with revolver borrowing providing leverage is maintained below 3.0x. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch has made no material adjustments that are not disclosed within the company's public filings. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of 3 - ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. ST ANNE RETIREMENT: Fitch Rates $35MM Revenue Bonds 'BB+' --------------------------------------------------------- Fitch Ratings assigned a 'BB+ rating to the following bond expected to be issued on behalf of Saint Anne's Retirement Community: -- $35.785 million Lancaster County Hospital Authority revenue bonds, series 2020. Bond proceeds will be used to finance certain capital projects, refund SARC's outstanding series 2017 notes (unrated), and fund the termination of an interest rate swap related to the series 2017 notes. In addition, bond proceeds will fund approximately 18 months of capitalized interest, fund a debt service reserve and pay the costs of issuance. The bonds are expected to price via negotiation the week of February 17th. In addition, Fitch has affirmed the 'BB+' rating on approximately $16.085 million of outstanding bonds previously issued through the Authority on behalf of SARC. The Rating Outlook is Stable. SECURITY The bonds are secured by a pledge of the gross revenues of the obligated group, mortgage interest in certain property and a master debt service reserve fund. KEY RATING DRIVERS CONTINUED STRONG OCCUPANCY: Over the last three years, SARC has maintained strong census across all its levels of care. In fiscal 2019, SARC averaged 87% in its independent living units (ILUs), 98% in its personal care units/assisted living units (PCUs/ALUs), 96% in its memory care units (MCUs), and 87% in its skilled nursing facility (SNF) beds. While SARC saw a decline in ILU census after the addition of 54 new units in March 2019, which have been fully occupied as of November 2019, occupancy was 98% in December 2019. With a solid track record of successfully bringing new projects online and a strong waitlist with 288 people, SARC is positioned well for continued strong census after the completion of the 30 new apartments. SOLID OPERATIONAL PERFORMANCE SUSTAINED: Due to the strong occupancy and expense management strategies, SARC has sustained financial performance since fiscal 2016. Over the last three fiscal years, SARC has averaged a solid 93.9% operating ratio, 10.8% net operating margin (NOM), and 4.5% excess margin, which all compare favorably to Fitch's below investment grade (BIG) category medians of 100.7%, 3.8%, and negative 2.4%, respectively. While the operational measures are projected to be softer than current period, it is expected that SARC will maintain its good financial performance over the near term and see continued improvement in said measures after the completion of the expansion project. CONTINUED SUCCESSFUL CAPITAL EXPANSION: SARC is entering Phase II of its multi-phase ILU expansion project. Phase I of the expansion project added 54 new apartments that have been successfully occupied within the projected time frame. Phase II of the expansion project will add another 30 new apartments. Overall project costs equates to $40 million including $10 million for Phase II. SARC is currently taking presales for the next phase of the ILU expansion project, which will be funded from the 2020 bond issuance. LIMITED DEBT CAPACITY: SARC's pro forma debt burden is still manageable, evidenced by maximum annual debt service (MADS) equal to 18.1% of total revenue and 18x pro forma debt to net available. Of note, SARC's pro forma revenue-only coverage equates to less than adequate 0.7x. However, after stabilization of the project, revenue-only coverage shows improvement up to 1.2x. While it is not anticipated that SARC will issue further debt in the near term, any further deterioration of the aforementioned metrics will put negative pressure on the 'BB+' rating. RATING SENSITIVITIES LIGHT LIQUIDITY: In fiscal 2019, SARC had unrestricted cash and investments of $9.5 million, which translates into 203 days cash on hand (DCOH), 18% cash to pro forma debt, and 2.8x pro forma cushion ratio and remains adequate for its current rating level. Fitch expects cash to debt to be negatively impacted during the expansion and subsequently improving to approximately 27%, while DCOH improves to 222 days and cushion ratio improves to 3.9x over the next five years. However any negative deviation from forward looking projections could put negative pressure on the rating. CAPITAL PROJECT EXECUTION: Fitch expects Saint Anne's Retirement Community to execute its upcoming independent living expansion project on time and on budget while maintaining its strong occupancy levels and sound operating profile. Any project execution issues such as construction delays, cost overruns, or fill-up delays that result in material deviations from anticipated operations could put negative pressure on the rating. CREDIT PROFILE SARC is a Type-C continuing care retirement community located outside Columbia, PA in the township of West Hempfield, which is approximately 35 miles southwest of Harrisburg and 10 miles west of Lancaster. SARC is sponsored by the Religious Congregation of Sisters of the Adorers of the Blood of Christ, United States Region (ASC). SARC's facilities consist of 126 ILUs (37 cottages and 89 apartments), 51 personal care ALUs, a 51-bed MCU, and a 61-bed SNF. SARC primarily offers fee-for-serve contracts, with 30% refundable, 60% refundable, and fully amortizing entrance fee plans available for all villa and cottage residents. In their IL apartments, SARC offers primarily rental contracts, which require a one-time community fee upon entry. In fiscal 2019 (ending June 30th), SARC reported total operating revenues of $18.7 million and derived from SNF accounting for 66.4%, ALU 18.5% and ILU 15.1%. CAPITAL PROJECT UNDERWAY SARC is currently entering Phase II of its multi-phased ILU expansion project at its campus. Phase I of the project added two new IL apartment buildings consisting of 54 total ILU apartments. The 54 new ILU apartments were completed in March 2019 and fully occupied by November 2019. Phase II of the project will add a third new IL apartment building consisting of 30 ILU apartments, beginning in 2020 with expected completion March 2021. While the original expansion project also called for adding more IL cottages prior to the start of phase II, SARC has not moved forward with the cottages. SARC still has plans to build up to 30 cottages in the future as demand necessitates. The addition of more cottages should improve the cash generation due to the sizeable entrance fees that would be received. If SARC is able to move forward with the cottages this would be expected to improve the overall cash related metrics in the future. Total project cost for Phase I and II are expected to be approximately $40 million, with the remaining $10 million for Phase II to be funded with the issuance of series 2020. Despite the additional debt associated with the expansion project, the project is expected to continue to be accretive to SARC's financial and operating profiles. To date, 7 of the 30 (23%) IL apartments in Phase II have been pre-sold with prospective residents making a $5,000 deposit. As of December 2019, SARC had a waitlist of 288 people and it is expected that the majority of the apartments will be filled from this list similar to Phase I. SARC's strong demand and successful operating history should continue to position them well to successfully execute its Phase II capital project. SOLID CENSUS Despite the presence of competition in its primary service area, SARC has maintained solid census across all levels of care in recent years. SARC notes that due to operating primarily as a rental contract LPC the competition is lessened. Over the last three fiscal years, SARC averaged 93% in its ILUs, 96% in its ALUs, and 86% in its SNF. As Phase II is expected to be stabilized in fiscal 2022, SARC is projecting occupancy to be between 94% and 95% from that point forward. Overall, SARC's solid census, rental contract structure, successful fill up of Phase I and strong waiting list mitigate concerns regarding its ability to fill its new ILUs. ADEQUATE FINANCIAL/OPERATING PROFILES SARC has continued to demonstrate solid operational performance. Despite some increasing expenses including food cost over the past few years, SARC has continued to outpace its budgets annually. Over the last three fiscal years, SARC has averaged a 93.9% operating ratio, 10.8% NOM, and 4.6% excess margin which all compare favorably to Fitch's 'BIG' category medians of 100.7%, 3.8%, and negative 2.4%, respectively. Upon stabilization, SARC is projecting its operating ratio to equate to 95.4%, NOM of 15.5% and excess margin of negative 4.2%. After stabilization the aforementioned metrics are expected to see further improvement. However, SARC's NOMA remained weak during the same time period at an average of 12.7%, which remains weaker than the category median of 19.4% and reflects its low reliance on entrance fees. As with other metrics, NOMA will also see improvement after stabilization to 17.2%. Similar to Phase I of the expansion project, Fitch expects SARC's Phase II ILU expansion project to be accretive to its operating profile and anticipates incremental improvement in operational performance throughout the construction and fill-up period. Material deviations from expectations could pressure the rating. In fiscal 2019, SARC had $9.5 million in unrestricted cash and investments, which translates into 203 DCOH, 25% cash to pro forma debt, and 2.8x pro forma cushion ratio, which show mixed results when compared to Fitch's 'BIG' medians of 312, 33.0%, and 4.3x, respectively. Despite the mixed results, SARC project cash to debt to drop to approximately 20% and improving to 24% after stabilization. While cash to debt will remain light for 'BB+' rating it is its view that this metric remains sufficient for its rating level given SARC's primarily fee-for-service contracts. STOREWORKS TECHNOLOGIES: ScanSource Appointed as Committee Member ----------------------------------------------------------------- The U.S. Trustee for Region 12 on Feb. 6, 2020, appointed ScanSource as new member of the official committee of unsecured creditors in the Chapter 11 case of StoreWorks Technologies, Ltd. The creditor can be reached through: ScanSource 12 Logue Ct. Greenville, SC 29615 Contact Person: William Harrison Phone: (864)286-4568 Email: William.Harrison@scansource.com The bankruptcy watchdog had earlier appointed Xenia and Engineered Network Systems, LLC, court filings show. Troy Stelzer of Xenia was designated as acting chairperson of the committee pending selection of a permanent chairperson. About StoreWorks Technologies StoreWorks Technologies, Limited -- https://www.storeworks.com/ -- is a computer systems design company located in Eden Prairie, Minn., with a goal to revolutionize retail operation through the application of technology. StoreWorks provides comprehensive solutions to retailers in these segments: kiosk, mobility payments, digital signage, store-level peripherals, back office revolution and network infrastructure. StoreWorks Technologies sought Chapter 11 protection (Bankr. D. Minn. Case No. 19-43814) on Dec. 20, 2019. In the petition signed by CEO Anil Konkimalla, the Debtor was estimated to have between $1 million and $10 million in both assets and liabilities. Judge Katherine A. Constantine oversees the case. Fredrikson & Byron, P.A., is the Debtor's legal counsel. SUGARFINA INC: Debtors Have Until May 5 to File Plan & Disclosures ------------------------------------------------------------------ SGR Winddown, Inc. and its debtor affiliates filed with the U.S. Bankruptcy Court for the District of Delaware a Motion for an order extending the period during which the Debtors may file a Plan and Disclosure Statement and Solicit Acceptances. On January 21, 2020, Judge Mary F. Walrath ordered that: * The Motion is granted. * The period during which the Debtors have the exclusive right to file a plan is extended through and including May 5, 2020. * The period during which the Debtors have the exclusive right to solicit acceptances of a plan is extended through and including July 2, 2020. A full-text copy of the order dated January 21, 2020, is available at https://tinyurl.com/qkw72sr from PacerMonitor.com at no charge. About Sugarfina Inc. Sugarfina Inc. -- https://www.sugarfina.com/ -- operates an "omnichannel" business involving design, assembly, marketing and sale of confectionary items through a retail fleet of 44 "Candy Boutiques", including 11 "shop in shops" within Nordstrom's department stores, a wholesale channel, e-commerce, international franchise, and a corporate and custom channel. Its offerings are sourced from the finest candy makers in the world and include such iconic varieties as Champagne Bears, Peach Bellini, Sugar Lips, Green Juice Bears and Cold Brew Bears. The Debtors employ 335 people, including 71 individuals at their headquarters in El Segundo, Calif. Sugarfina, Inc. and two affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No.19-11973) on Sept. 6, 2019. At the time of the filing, the Debtor disclosed assets of between $10 million and $50 million and liabilities of the same range. The Hon. Mary F. Walrath is the case judge. The Debtors tapped Morris James LLP as counsel, and Force Ten Partners, LLC as financial advisor. BMC Group Inc. is the claims agent. Andrew Vara, acting U.S. trustee for Region 3, appointed a committee of unsecured creditors on Sept. 17, 2019. The committee tapped Bayard, P.A. as its legal counsel, and Province, Inc. as its financial advisor. On Oct. 31, 2019, Sugarfina Inc., et al., consummated the sale of substantially all their assets to Sugarfina Acquisition Corp. The Debtors changed their names to SGR Winddown, Inc., et al., following the sale. SUNCREST STONE: Again Amends Reorganization Plan ------------------------------------------------ Debtors Suncrest Stone Products, LLC, and 341 Stone Properties, LLC filed a Second Amended Joint Plan of Reorganization and a Disclosure Statement on Jan. 21, 2020. On May 20, 2019, and prior to the hearing on the Trustee Motion, the Debtors filed their Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code. The hearing on the Disclosure Statement for the Prior Plan was continued a number of times, including on account of the parties having agreed to hold that matter pending receipt of the Examiner's Final Report. On Sept. 6, 2019, the Examiner submitted a favorable report, and on Nov. 8, 2019, the Debtors elected to amend the Prior Plan. However, on Nov. 25, 2019, Newtek filed two pleadings, which appear to be Sec. 1111(b)(2) elections as to certain claims filed by Newtek. The Court has not ruled on or been asked to rule on the propriety, timing, or scope of the elections contained in those pleadings. As of the Petition Date, Debtors scheduled total liabilities of approximately $6,942,784. Such liabilities consisted of secured obligations to primarily to Newtek and Suncrest, Inc., of approximately $6,336,506 to fund the acquisition of the business. The Debtors also scheduled various unsecured liabilities, including disputed claims, totaling approximately $606,278, consisting of various trade payables, bills, and credit cards. The 2nd Amended Plan provides that the Class 2(a) Allowed Secured Claim of Newtek Small Business Finance Related to Real Property is estimated to total approximately $616,200 as of the Effective Date, based upon the value of Real Property ($616,200) and not taking into consideration senior tax liens against the Real Property, if any, which liens, if senior, would reduce the total Class 2(a) Allowed Secured Claim by the amount of such senior liens. The Class 2(a) Allowed Secured Claim will be satisfied in full by debtor 341 Stone, after notice to the Holder, by 341 Stone selling the Real Property (with the Holder retaining its right to credit bid) or by Debtor 341 Stone surrendering and assigning to the Holder all of 341 Stone's interest in the Real Property by special warranty deed, each in full satisfaction of the Class 2(a) Allowed Secured Claim, with such sale or surrender and abandonment to occur within 30 days after the Effective Date or by such other time as necessary to satisfy the requirements of the Bankruptcy Code. Any resulting Allowed Unsecured Deficiency Claim shall be treated as set forth in Class 7. Subject to other determination by the Court, as contemplated in Class 1(a), the Holder of the Class 2(a) Allowed Secured Claim shall be solely responsible for payment of any Class 1(a) Allowed Secured Claim and Reorganized Debtors shall have no further obligation for payment of any such Class 1(a) Allowed Secured Claim. The Holder of the Class 2(a) Allowed Secured Claim shall retain its lien and lien priority, as it existed on the Petition Date, pursuant to Section 1129(b)(2)(A)(i)(I) of the Bankruptcy Code until the Real Property is sold or until it is surrendered and assigned as provided in the Plan. Class 9 Allowed Convenience Class of $750 or less and claims voluntarily reduced to $750, projected to total approximately $120,713, will be paid by Reorganized Debtor Suncrest Stone the lesser of (i) 100% of the Allowed Amount of such claims and (ii) $750, without interest, within 14 days following the Effective Date in full satisfaction of such claims. The Allowed Unsecured Claims in Class 10, anticipated to total approximately $360,267, will be paid as follows: * Option 1: Holders of Allowed Unsecured Claims in Class 10 may elect to reduce their claim to $750 and participate as an Allowed Claim in Class 9. Such election will be indicated on any Ballot filed with respect to the Plan. The Class 9 payment will be in full satisfaction of the Class 10 creditor's Allowed Claim. * Option 2: Holders of Allowed Claims in Class 10 who do not elect Option 1 shall receive from Reorganized Debtor Suncrest Stone their pro rata share, based on the amount of their Allowed Unsecured Claim, of $25,000. The Plan is a reorganizing Chapter 11 plan for the Debtors. The funds required for implementation of the Plan and the distributions under the Plan shall be provided from revenue from the regular operation of the Reorganized Debtors' businesses, injections of capital from Edgewood, and litigation and other recoveries, if any, from the Creditors Trust. The Plan contemplates and proposes that Suncrest Stone will relocate its production operation to a new facility on or shortly after the Confirmation Date. Specifically, the Debtors have identified a suitable and more cost-effective alternative facility in Fitzgerald, Georgia that is a little over 25 miles from the current facility in Ashburn, Georgia. Rather than purchase that facility, Reorganized Debtor Suncrest Stone will lease the new facility on a Post-Confirmation basis from EWE Warehouse Investments XIII, LLC. The Plan will be administered by the Reorganized Debtors, who will be vested with power and authority over all remaining assets of Debtors and the Estate. The Manager of Reorganized Debtors will be Max Suter. The Reorganized Debtors will have exclusive control of the remaining Assets. A full-text copy of the Disclosure Statement for the Second Amended Joint Plan of Reorganization dated Jan. 21, 2020, is available at https://tinyurl.com/v7os8ko from PacerMonitor.com at no charge. The Debtors are represented by: Matthew S. Cathey David L. Bury, Jr. Stone & Baxter, LLP Suite 800, Fickling & Co. Building 577 Mulberry Street Macon, Georgia 31201 About Suncrest Stone Products Suncrest Stone Products, LLC -- https://www.suncreststone.com/ --is a stone supplier in Ashburn, Georgia. Its products include Ashlar, Country Ledge, Ledge, River Rock, Olde-Castle, Splitface, Stock, and Rubble. Suncrest Stone Products and 341 Stone Properties, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Ga. Lead Case No. 18-10850) on July 13, 2018. In the petition signed by Max Suter, authorized officer, Suncrest estimated assets of less than $1 million and liabilities of $1 million to $10 million. 341 Stone estimated $1 million to $10 million in assets and liabilities. Judge Austin E. Carter is the presiding judge. Stone & Baxter, LLP, is the Debtors' counsel. McMurry Smith & Company is the accountant. Crumley and Associates Inc. d/b/a South Georgia Appraisal Company is appraiser to the Debtor. TENNECO INC: Moody's Affirms B1 CFR & Alters Outlook to Negative ---------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Tenneco Inc. including the Corporate Family and Probability of Default ratings at B1 and B1-PD, respectively, the senior secured debt at Ba3, and the senior unsecured debt at B3. The Speculative Grade Liquidity Rating remains unchanged at SGL-3. The outlook is revised to negative from stable. The following ratings were affirmed: Issuer: Tenneco Inc. Corporate Family Rating, at B1; Probability of Default Rating, at B1-PD; senior secured debt at Ba3 (LGD3); senior unsecured debt, at B3 (LDG5); Issuer: Federal-Mogul Holdings LLC senior secured debt, at Ba3 (LGD3); Issuer: Federal-Mogul LLC senior secured debt, at Ba3 (LGD3); Outlook actions: Tenneco Inc. Revised to Negative from Stable RATINGS RATIONALE The ratings recognize Tenneco's strong position as a $17+ billion Tier One OEM auto supplier, with a sizeable aftermarket business composed of well-known brand names. Tenneco's clean air business (about 40% of revenues) will stay important as auto OEMs address the increasingly more stringent emission regulations. The powertrain business (about 25% of revenues), however, faces long-term pressures as the auto industry progresses towards increasing adoption of electric propulsion. The internal combustion engine will have very sizeable vehicle penetration for some time, and Tenneco's product suite will have a high share. Tenneco's aftermarket business (about 18% of revenues) should provide a more stable balance to the volatility in the OEM business. The anticipated spin-off of Tenneco's aftermarket and ride control business (named DRiV), planned as part of the Federal Mogul merger has been delayed. Weakened global auto production limited Tenneco's profits that would drive the financial deleveraging needed to set up the two separate companies with a capital structure appropriate for long-term success in the cyclical auto industry. Tenneco recently announced that it is reviewing strategic alternatives which will consider the sale of one of Tenneco's divisions or product lines. Absent a sufficiently deleveraging transaction, the spin-off of DRiV is not likely until 2021 at the earliest. Financial leverage is higher than Moody's anticipated at this time as revenues and profits are below Moody's expectations. For the fiscal year-end 2019 Moody's estimates Tenneco's Debt/EBITDA at about 6x, improved over the year but at a slower pace because of lower than expected global auto production. Tenneco's investments for cost savings and synergies in preparation for the previously planned spin-off will somewhat offset softening industry conditions. This should result in a modestly improved Debt/EBITDA of below 6x by year-end 2020. These investments were mostly in connection with the planned spin off, so Tenneco does have other operating alternatives to address a weakening market. Moody's believes that Tenneco will maintain its capital allocation policy to prioritize strengthening its balance sheet over returning capital to shareholders, and to pursue the separation of DRiV as anticipated. The negative outlook incorporates the risk of global automotive production weakening into 2021 and perhaps accelerating, resulting in constraints on Tenneco's profits with Debt/EBITDA that would be about 6x into 2021. Softening global economic conditions and more stringent emission standards in Europe may pressure global auto production near-term. Nonetheless, Moody's expects global auto sales to grow at about 1% per year over the coming decade, which should support steadily higher global auto production. Tenneco's liquidity is adequate, reflected by the SGL-3 Speculative Grade Liquidity, supported by the $1.5 billion revolving credit facility (about $1.3 billion available as of September 30, 2019) but only nominal free cash flow through 2020. Cash as of September 30, 2019 was $389 million, although should end the year higher from the seasonal working capital inflows. The credit facility has two financial covenants, a maximum net leverage ratio and a minimum interest coverage ratio, and the weakening profits from lower auto production this year is expected to reduce covenant cushion. Tenneco relies on a significant amounts of accounts receivable factoring/securitization as a source of financing (included in Moody's adjusted debt calculations). If unable to maintain and extend these securitizations, additional borrowings under the revolving credit facility would be required to meet liquidity needs. The ratings could be upgraded with stronger than anticipated profit and cash flow growth from stability in global automotive demand or the ability to manage the volatility, with increasing product penetration and with faster than expected realized synergies. Consideration for a higher rating could result from Debt/EBITDA below 4x, and EBITA/Interest coverage, inclusive of restructuring, approaching 3x, while maintaining an adequate liquidity profile. The ratings could be downgraded if the company is unable to demonstrate the ability to manage volatility and weakness in global automotive demand while maintaining a competitive operating margin. The ratings could also be downgraded if Debt/EBITDA is expected to be sustained over 5.5x, in Moody's view, into 2021, or EBITA/Interest coverage expected also to be sustained in the mid 1x range into 2021. The principal methodology used in these ratings was Automotive Supplier Methodology published in January 2020. Tenneco Inc., headquartered in Lake Forest, Illinois, is one of the world's leading designers, manufacturers and marketers of Aftermarket, Ride Performance, Clean Air and Powertrain products and technology solutions for light vehicle, commercial truck, off-highway, industrial and the aftermarket. On October 1, 2018, Tenneco completed the acquisition of Federal-Mogul LLC, a leading global supplier to original equipment manufacturers and the aftermarket. Tenneco expects to separate its businesses to form two new, independent companies, an Aftermarket and Ride Performance company (DRiV) as well as a new Powertrain Technology company (New Tenneco). Revenues for the LTM period ending September 30, 2019 were $$17.6 billion. TEPA PROPERTIES: Court Denies Cash Collateral Motion as Moot ------------------------------------------------------------ For reasons stated on record, Judge A. Jay Cristol denied the request of Tepa Properties LLC to use cash collateral after having considered the Debtor's cash collateral motion and the objection thereto filed by La Aurora Management, Inc. A copy of the order is available for free at https://is.gd/YIifhW from PacerMonitor.com. About Tepa Properties Tepa Properties LLC manages commercial real estate. Tepa filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 19-26228), on Dec. 3, 2019. At the time of filing, the Debtor was estimated to have $1 million to $10 million in assets and $1 million to $10 million in liabilities. The petition was signed by Gerardo Arquero Pereda, member manager. Judge A. Jay Cristol oversees the case. The Debtor is represented by Clara G. Martinez, Esq., at Clara Martinez Law PA. TRICO GROUP: Moody's Alters Outlook on B3 CFR to Positive --------------------------------------------------------- Moody's Investors Service affirmed the ratings of Trico Group, LLC including the B3 corporate family rating and senior secured rating, and B3-PD Probability of Default Rating. The rating outlook has been changed to positive. "Trico is expected to build on synergies already realized as it operates with significantly larger scale following last year's acquisitions of FRAM and ASC/Airtex," said Moody's analyst Mike Cavanagh. "Continued execution around its cost saving initiatives should support an EBITA margin in the mid-teens range and debt/EBITDA below 5x through 2020." RATINGS RATIONALE Trico's ratings reflect it is still relatively short-track record operating with multiple businesses and what has been an aggressive approach to debt-funded acquisitions. Trico also has high customer concentrations with several large retailers. The company operates within the highly cyclical automotive industry, but its aftermarket presence at over 70% of revenue provides a more stable source of demand, especially given the nature of several of its products -- specifically its wiper blades where its market position is particularly favorable. Wiper blades and systems generate over 40% of consolidated sales. Moody's expects Trico to continue to achieve cost savings and procurement efficiencies through 2020 to maintain EBITA margins in the mid-teens range, which would be strong compared to its peers. Aftermarket sales should somewhat offset pressures in its lower-margin original equipment (OE) businesses. There is an elevated presence of governance and key man risk -- Trico's CEO maintains full ownership of the company. The CEO had previously controlled Crowne Group, LLC and maintained control of Crowne's OE business following the 2018 separation with Trico, creating certain governance risks at the time relating to dual-ownership. Currently, the CEO no longer maintains ownership in those OE businesses, thus allowing for full managerial resources to be focused on Trico. Heightened event risk remains though given management's track record for debt-funded acquisitions. As a primarily aftermarket automotive supplier, Trico's environmental risk exposure is viewed as manageable although longer-term trends towards more electrified vehicles will certainly pressure volumes on several Trico products including oil filters and fuel pumps. The positive outlook reflects Moody's expectation that Trico will continue to pursue cost saving initiatives amidst softening industry conditions in 2020 to support EBITA margins in the mid-teens range and sustain debt/EBITDA below 5x absent any further debt-funded acquisitions or shareholder returns. The company is expected to maintain an adequate liquidity profile supported by free cash flow generation (inclusive of restructuring spend) of at least $40 million and availability under its asset-based lending facility of at least $100 million. Trico factors about $160 million of customer accounts receivables which are accounted for as true sales. Moody's views these amounts as a potential financing requirement given their recurring nature and their customer importance. If the market for the factored accounts receivables were to be disrupted, a combination of renegotiated terms and/or alternative financing could be required to support liquidity needs. The ratings could be upgraded if Trico demonstrates consistent organic revenue gains across its product categories and an ability to sustain its realized costs savings and synergies. Metrics that could support an upgrade include free cash flow to debt approaching 7%, EBITA/interest expense above 2.25x and debt/EBITDA sustained below 5x. The ratings could be downgraded if Trico's margin profile deteriorates from either an inability to maintain cost savings or competitive industry pressures. Metrics that could indicate pressure on the rating include debt/EBITDA above 7x and EBITA/interest expense sustained below 1.25x. Additionally, further debt-funded acquisitions, shareholder distributions or a deterioration in liquidity could also result in a lower rating. The following rating actions were taken: Outlook Actions: Issuer: Trico Group, LLC Outlook, Changed to Positive from Stable Affirmations: Issuer: Trico Group, LLC Probability of Default Rating, Affirmed B3-PD Corporate Family Rating, Affirmed B3 Senior Secured Bank Credit Facility, Affirmed B3 (LGD3) The principal methodology used in these ratings was Automotive Supplier Methodology published in January 2020. Trico Group, LLC, headquartered in Cleveland, OH, is a leading manufacturer and distributor of primarily aftermarket component parts for the automotive and other industrial equipment markets. The company's products include wipers and blades, water pumps, air and oil filters, fuel pumps, spark plugs and gas springs. Pro forma revenue for the twelve months ending September 2019 was about $1.3 billion. TWO GUNS CONSULTING: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Two Guns Consulting & Construction, LLC 4136 IH 37 N. Service Rd Odem, TX 78370 Business Description: Two Guns Consulting & Construction, LLC is a privately held company in the heavy & civil engineering construction industry. Chapter 11 Petition Date: February 11, 2020 Court: United States Bankruptcy Court Southern District of Texas Case No.: 20-20077 Judge: Hon. David R. Jones Debtor's Counsel: Shelby A. Jordan, Esq. JORDAN, HOLZER & ORTIZ, P.C. 500 North Shoreline Blvd. Suite 900 Corpus Christi, TX 78401 Tel: 361-884-5678 Email: sjordan@jhwclaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Charles Luke Duncan, sole managing member. A copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://is.gd/ZfxAoE UNIT CORP: FMR LLC Has 12.5% Stake as of Dec. 31 ------------------------------------------------ FMR LLC and Abigail P. Johnson disclosed in an amended Schedule 13G filed with the Securities and Exchange Commission that as of Dec. 31, 2019, they beneficially own 6,926,460 shares of common stock of Unit Corporation, which represents 12.473% of the shares outstanding. Fidelity Series Intrinsic Opportunities Fund also reported beneficial ownership of 5,400,000 Common Shares. Members of the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. A full-text copy of the regulatory filing is available for free at the SEC's website at: https://is.gd/kmlq8u About Unit Corporation Unit Corporation -- http://www.unitcorp.com/-- is a Tulsa-based, publicly held energy company engaged through its subsidiaries in oil and gas exploration, production, contract drilling, and gas gathering and processing. Unit's Common Stock is listed on the New York Stock Exchange under the symbol UNT. Unit Corporation reported a net loss attributable to the company of $45.29 million for the year ended Dec. 31, 2018. For the nine months ended Sept. 30, 2019, Unit Corp reported a net loss attributable to the company of $218.90 million. * * * As reported by the TCR on Nov. 15, 2019, Moody's Investors Service downgraded Unit Corporation's Probability of Default Rating to Ca-PD from B3-PD, Corporate Family Rating to Caa1 from B3, and senior subordinated notes to Caa2 from Caa1. The downgrade of the PDR reflects Unit's proposed debt exchange offer, which Moody's views to be a distressed exchange. The Caa1 CFR and Caa2 rating on the 2021 notes reflect Moody's view on expected recovery, which is likely to be in the 80%-90% range. Prior to the exchange offer, Unit was contending with depressed commodity prices, looming maturities in a challenged refinancing environment and declining cash flow, Moody's said. As reported by the TCR on Jan. 21, 2020, Fitch Ratings downgraded the Long-Term Issuer Default Rating of Unit Corporation to 'CC' from 'CCC+'. Fitch's downgrade and watch reflect the company's heightened refinancing and liquidity risks associated with pro-longed operational deterioration since its bond exchange announcement. UNITED RENTALS: Moody's Rates $750MM Unsec. Notes Due 2030 'Ba3' ---------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to United Rentals (North America), Inc.'s planned $750 million senior unsecured notes due 2030. URNA's parent, United Rentals, Inc. and URNA's domestic subsidiaries will guarantee the notes. The company's other ratings, including its Ba2 corporate family rating, Ba2-PD probability of default rating, Baa3 senior secured first lien rating, Ba1 senior secured second lien rating, and Ba3 senior unsecured rating are unaffected. The rating outlook remains stable. URNA plans to use the proceeds from the notes together with about $50 million of revolver borrowings to fund the redemption of all $800 million of the 5.5% senior unsecured notes due 2025. The ratings on these 5.5% notes will be withdrawn following the redemption. RATINGS RATIONALE URNA's ratings reflect the company's considerable scale that supports its leading position in the North American equipment rental industry, as well as its moderate debt-to-EBITDA of 2.7 times (for the twelve months ended December 31, 2019). URNA has been acquisitive, and the ratings also incorporate URNA's track record of quickly integrating acquisitions and subsequently deleveraging to restore its credit metrics. While the event risk around another large acquisitions remains, Moody's anticipates the company will focus on integration of its prior purchases and maintain moderate financial leverage. Moody's expect URNA's debt-to-EBITDA will remain below 3 times through 2021. The equipment rental industry is susceptible to a high degree of cyclicality and is a very competitive and fragmented space, with local companies competing against the few national scale participants such as URNA. Staying competitive requires access to considerable capital to grow the equipment fleet. In the event of a downturn, Moody's expects URNA to reduce equipment purchases and also to sell from its fleet to mitigate pressure on free cash flow. Moody's views the company's environmental risk to be low, but URNA adheres to a number of regulations around the disposal of hazardous waste and wastewater from equipment washing. Moody's also views social risk to be low, but URNA does have union-represented employees, and must abide by regulations around worker safety and training. Governance risk to be relatively low, but the company does have a history of engaging in relatively large, debt-funded acquisitions. The board of directors is comprised of a majority of independent directors, but has the potential to change abruptly since they are elected annually. The stable outlook reflects Moody's expectation for ongoing EBITDA growth and steady leverage around management defined targets to accommodate re-leveraging following future acquisitions and mitigate pressure when demand cycles down. The ratings could be upgraded with sustained debt-to-EBITDA of about 2.5 times, EBITDA-to-interest of better than 7 times, and debt repayment following debt-funded acquisitions. The ratings could be downgraded with debt-to-EBITDA above 3 times or EBITDA-to-interest of about 4 times. Sustaining higher debt balances following debt-funded acquisitions or the weakening of liquidity, or if free cash flow is not substantially positive during a downturn as URNA cuts equipment spending could also lead to a ratings downgrade. Assignments: Issuer: United Rentals (North America), Inc. Senior Unsecured Regular Bond/Debenture, Assigned Ba3 (LGD5) The principal methodology used in these ratings was Equipment and Transportation Rental Industry published in April 2017. United Rentals (North America), Inc., headquartered in Stamford, CT, is the largest US equipment rental company with 13% market share in 2019 and a rental fleet of approximately 665,000 units. Investment in rental equipment approximates $14.6 billion across the company's about 1,164 rental locations across the US and Canada. The company has two reportable segments: General Rentals and Trench, Power and Pumps. While the primary source of revenue is from renting equipment, the company also sells new and used equipment and related parts and services. United Rentals reported about $9.4 billion of revenue for 2019. UNITED RENTALS: S&P Rates $750MM Unsecured Notes 'BB-' ------------------------------------------------------ S&P Global Ratings assigned its 'BB-' issue-level rating and '5' recovery rating to United Rentals (North America) Inc.'s (URNA) proposed $750 million senior unsecured notes due in 2030. The '5' recovery rating indicates its expectation for modest recovery (10%-30%; rounded estimate: 25%) in the event of a payment default. URNA is a subsidiary of Stamford, Conn.-based equipment rental company United Rentals Inc. (URI), which with URNA's current and future domestic subsidiaries (subject to limited exceptions) guarantees the notes. The company plans to use the proceeds, with borrowings under its asset-based lending (ABL) facility, to redeem its $800 million 5.5% senior unsecured notes due in 2025 on or after July 15, 2020. S&P views the transaction as largely leverage neutral. S&P's 'BB' issuer credit ratings and stable outlooks on URI and URNA are unchanged. The company's equipment rental revenue increased 4.1% on an organic basis in 2019, and S&P expects slower growth in 2020 as U.S. nonresidential construction activity decelerates and industrial demand remains relatively soft. Specialty rental growth should remain healthy and a focus of URI's growth investments. The rating agency believes the company's fleet utilization could modestly improve this year as it redeploys its 2019 excess fleet and maintains or reduces net rental capital expenditures. S&P expects flat to modestly higher EBITDA and the company's plan to use $1 billion of its estimated $1.6 million-$1.8 million in free cash flow to pay down debt in 2020 to enable URI to maintain leverage comfortably within the 2x-3x range on an S&P-adjusted basis. Such debt leverage provides a sufficient cushion at the current rating to absorb potentially weaker end market conditions. ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors -- S&P's simulated default scenario contemplates an unexpected and drastic downturn in the nonresidential construction industry that severely strains the company's equipment usage, rental rates, revenue, and cash flow. -- Although S&P believes URI would likely reorganize after a default, the rating agency uses a discrete asset value (DAV) approach to analyze recovery prospects for most general equipment rental providers. S&P believes this method provides a conservative estimate of the likely value available to creditors, although realization rates could be lower than the rating agency assumes if a large amount of equipment floods the market. -- S&P's DAV approach starts with the net book value of the company's assets as of Dec. 31, 2019. It assumes balance sheet accounts are partially diluted to reflect the estimated loss of appraised value through additional depreciation or expected contraction in working capital assets in the period leading up to the hypothetical default. S&P then applies realization rates to the assets, reflecting the friction of selling or discounts potential buyers or restructurers would apply in distressed circumstances. -- S&P assumes realization rates of 75% for rental equipment, 80% for unsold accounts receivable (S&P excludes the assets and liabilities related to URI's accounts receivable special purpose entity), 65% for inventory, and 40% for other property and nonrental equipment. Simulated default assumptions -- Simulated year of default: 2025 -- Jurisdiction: U.S. -- ABL facility: 60% drawn at default Simplified waterfall -- Gross enterprise value: $6.2 billion -- Net enterprise value (after 5% administrative expenses): $5.8 billion -- Collateral/noncollateral valuation split: 91%/9% -- Collateral value available to ABL and first-lien lenders: $5.3 billion -- ABL estimate (60% utilization): $2.25 billion -- Recovery expectations: not applicable (unrated) -- First-lien secured term loan: $974 million -- Recovery expectations: 90%-100% (rounded estimate: 95%) -- Collateral value available to secured noteholders: $2.1 billion -- Secured second-lien notes: $767 million -- Recovery expectations: 90%-100% (rounded estimate: 95%) -- Total value available to unsecured claims: $1.9 billion -- Senior unsecured debt and pari passu claims: $7.2 billion -- Recovery expectations: 10%-30% (rounded estimate: 25%) All debt amounts above include six months of prepetition interest. UNIVERSAL HEALTH: 2019 Case Dismissed ------------------------------------- Bankruptcy Judge Neil W. Bason issued an order dated Jan. 22 dismissing the Chapter 11 proceedings that Universal Health Foundation commenced Dec. 12, 2019 (Bankr. C.D. Cal. Case No. 19-24527). Universal Health Foundation commenced another Chapter 11 proceedings (Bankr. C.D. Cal. 20-10531) on Jan. 17, 2020. The new case is underway before Judge Vincent P. Zurzolo. The Office of the U.S. Trustee has sought appointment of a patient care ombudsman in the 2019 case, pointing out that the Debtor is a medical clinic providing free or low cost medical services to the community in East Los Angeles. The U.S. Trustee noted that the Debtor has not filed any motions to excuse the appointment of a Patient Care Ombudsman. The Debtor entered into a judgment with its landlord for an Unlawful Detainer judgment wherein it would surrender its facilities no later than January 1, 2020. This requirement to relocate directly impacts patient safety and the events warrant the immediate appointment of an a independent and disinterested Patient Care Ombudsman not only to monitor the quality of patient care and report to the court, but perhaps most importantly to warn the Court if patient care is declining or being compromised. There is no other party in this case that is fulfilling or is capable of fulfilling the Bankruptcy Code mandated role of the PCO, who is also disinterested. "The United States Trustee cannot fulfill that role. The Debtor in this case provides medical services of a nature that require identification of any decline in the quality of care at the earliest instance. An independent PCO is absolutely essential to protect the patients' well-being," the U.S. Trustee said. A hearing on the matter was set for Jan. 14, 2020. At the hearing, the Court was also slated to hear the U.S. Trustee's separate request for dismissal of the case or conversion of the case to Chapter 7. U.S. Trustees can be reached at: Peter C. Anderson U.S. Trustee Jill M. Sturtevant, Esq. Assistant U.S. Trustee Trial Attorney 915 Wilshire Blvd., Suite 1850, Los Angeles, CA 90017 Telephone: (213) 894-4520 Facsimile: (213)894-2603 Email: dare.law@usdoj.gov A full-text copy of the U.S. Trustee's request is available at https://tinyurl.com/tp3ybjm from PacerMonitor.com at no charge. About Universal Health Foundation Los Angeles-based Universal Health Foundation filed its Chapter 11 petition (Bankr. C.D. Cal. Case No. 19-24527) on December 12, 2019, listing under $1 million in assets and under $500,000 in liabilities. The Law Office of Gary Kurtz serves as counsel to the Debtor. Following dismissal of its 2019 case, Universal Health Foundation filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 20-10531) on January 17, 2020, listing under $1 million in assets and under $500,000 in liabilities. Brandon J. Anand, Esq., at Anand Law, PC, serves as counsel to the Debtor in the 2020 case. VALERITAS HOLDINGS: Zealand Offers $23M Cash, to Keep Employees --------------------------------------------------------------- Valeritas Holdings, Inc., said that although it has experienced commercial success with V-Go, as of the bankruptcy filing date, the Company was still in the commercial growth stage of its operations and, therefore, had not generated profits or free cash flows. According to John E. Timberlake, president and CEO, for approximately 11 months prior to the Petition Date, the Company was engaged in an out of court sale and marketing process led by a boutique investment bank. In December 2019, the Company was facing diminishing liquidity, a lack of access to additional capital, and potential near-term defaults under the Prepetition Term Loan when it experienced a temporary supply disruption due to a manufacturing yield issue. This event led the Company's two potential buyers in its Out of Court Process to withdraw their bids. Following the collapse of the Out of Court Process and given its dwindling liquidity, the Company engaged PricewaterhouseCoopers LLP as financial advisor, and Lincoln International as investment banker, to explore strategic alternatives, including a restructuring through a chapter 11 process, and in particular, a potential going concern sale of the business through section 363 of the Bankruptcy Code, as well as funding to facilitate that process. Since December 2019, PwC and Lincoln have been working diligently to facilitate a soft landing into chapter 11 for the Company. Lincoln has been leading a marketing process to obtain debtor in possession financing and a stalking horse purchaser for the Company's assets. The business primarily is comprised of V-Go -- the current and future value of a unique and proven product -- the Company's attractive intellectual property portfolio (which includes approximately 161 patents granted and 50 patents pending), the value in additional applications of the Company's proprietary h-Patch technology, the ability to leverage scalable manufacturing operations, the potential to capitalize on a growth market, and a loyal and highly skilled workforce. On Dec. 20, 2019, Lincoln started supplementing and building out the data room that initially was populated during the Out of Court Process. Lincoln also began reaching out to potential purchasers, including companies focused on diabetes drug delivery or medical technology, global biopharmaceutical companies, diversified medical technology companies, and institutional investors focused on the life sciences space. Lincoln contacted approximately sixty strategic and financial parties. These efforts included, but were not limited to, in-depth calls and meetings with management, telephonic and in-person conversations with Lincoln, and physical site visits. On Feb. 9, 2020, the Company and Zealand Pharma A/S (together with its designee, if any, the "Stalking Horse Bidder") entered into that certain asset purchase agreement which the Stalking Horse Bidder agreed to purchase the Debtors' assets under section 363 of the Bankruptcy Code for $23 million in cash plus the assumption of certain liabilities, including up to $1.5 million in cure costs. The Stalking Horse Bidder intends to extend offers of employment to a majority of the Company's employees, and the Debtors are required to use commercially reasonable best efforts to, among other things, to "keep available the services of their respective officers and Employees." In fact, there is a closing condition in the Stalking Horse APA that requires "substantially all" of the Company's employees, and all of the Key Employees, to whom the Stalking Horse Bidder extends offers of employment to have accepted those offers as of (and conditioned upon) closing. Contemporaneously with this Declaration, the Debtors are filing a motion seeking approval of certain bidding and sale procedures, as well as approval of the sale of substantially all of the Debtors' assets to the highest or otherwise best bidder. Almost immediately after the Company reached an agreement in principle with the Stalking Horse Bidder, Lincoln turned its attention to obtaining debtor in possession financing from third party sources to fund the Chapter 11 Cases and support the Section 363 sale process. Initially, Lincoln approached the Stalking Horse Bidder and the Prepetition Secured Lenders to determine if either would be willing to extend debtor-in-possession financing to the Company. Neither party was willing to do so. In light of this, Lincoln canvassed the market and approached 50 potential outside lenders regarding the Debtors' financing needs. Lincoln's outreach resulted in 20 nondisclosure agreements being executed, allowing those potential lenders to access a confidential information presentation and an online data room. Five of those parties ultimately submitted postpetition financing proposals. Of the five proposals submitted, Lincoln recommended moving forward with two potential lenders for further discussions and to ensure that postpetition financing would be secured prior to commencement of the Chapter 11 Cases. Following extensive diligence efforts and negotiations, the Company entered into that certain Senior Secured Superpriority Priming Debtor-in-Possession Credit Facility Term Sheet with HB Fund LLC (the "DIP Lender"), and consented to by the Prepetition Agent, on February 9, 2020. Finally, and as is apparent from the terms of the Stalking Horse APA, the Company's employees are so critical to the Debtors' business that the Stalking Horse Bidder is seeking to extend offers of employment to nearly all of the Debtors' workforce, which would be contingent upon the stalking-horses successful bid and close of the transaction. Upon information and belief, however, the Company's competitors are aggressively pursuing the Company's employees. In recognition of these facts, the Company, in consultation with its Restructuring Professionals, and with the approval of the Compensation Committee of the Company's Board of Directors, developed a key employee retention plan ("KERP") to ensure that certain rank and file employees remain with the Company through the closing of the sale and a key employee incentive plan ("KEIP") to ensure that certain key executives are appropriately incentivized to achieve the highest or otherwise best offer for the Company's assets. The Debtors shortly will file a motion to approve the KEIP and KERP, as well as in the declaration in support of that motion. These programs are truly critical to the success of these Chapter 11 Cases. The Debtors are confident that they have put in place the necessary elements to ensure the ongoing viability of their business, including the continued delivery of V-Go to patients, and the success of these Chapter 11 Cases, even despite the external factors that have contributed to their commencement. About Valeritas Holdings Valeritas Holdings, Inc. -- https://www.valeritas.com/ -- is a commercial-stage medical technology company focused on improving health and simplifying life for people with diabetes by developing and commercializing innovative technologies. Valeritas' flagship product, V-Go Wearable Insulin Delivery device, is a simple, affordable, all-in-one basal-bolus insulin delivery option for adult patients requiring insulin that is worn like a patch and can eliminate the need for taking multiple daily shots. V-Go administers a continuous preset basal rate of insulin over 24 hours, and it provides discreet on-demand bolus dosing at mealtimes. It is the only basal-bolus insulin delivery device on the market today specifically designed keeping in mind the needs of type 2 diabetes patients. Headquartered in Bridgewater, New Jersey, Valeritas operates its R&D functions in Marlborough, Massachusetts. Valeritas Holdings, Inc., and three affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10290) on Feb. 9, 2020. Valeritas Holdings disclosed $49.2 million in total assets and $38.2 million in total debt as of Sept. 30, 2019. The Hon. Laurie Selber Silverstein is the case judge. DLA Piper LLP (US) is serving as legal counsel to Valeritas, Lincoln International is serving as investment banker, and PricewaterhouseCoopers LLP is serving as financial advisor. Kurtzman Carson Consultants LLC is the claims agent. VALVOLINE INC: Moody's Assigns Ba3 Rating on New Unsec. Notes ------------------------------------------------------------- Moody's Investors Service assigns Ba3 to Valvoline Inc.'s new senior unsecured $500 million notes due 2030. The ratings are one notch below the company's CFR rating of Ba2 reflecting the priority of the senior secured tranche of term loan debt in the capital structure. Proceeds from the issuance will be used to repay $375 million of the existing 5.5% senior unsecured notes due 2024 and add to balance sheet cash to be used for general corporate purposes. The outlook on the ratings is stable. "The financing is a logical step at this point in the credit cycle as it reduces the company's interest expense and cost of debt capital while pushing out the maturity profile," according to Joseph Princiotta, SVP at Moody's. "However, the new notes will increase adjusted gross leverage slightly to 3.9x on a pro forma basis -- we expect leverage to trend back to the mid 3.0x range to better support the current ratings and outlook" Princiotta added. Assignments: Issuer: Valvoline Inc. Senior Unsecured Regular Bond/Debenture, Assigned Ba3 (LGD5) Ratings Unchanged: Issuer: Valvoline Inc. Senior Unsecured Regular Bond/Debenture, Ba3 (LGD5 from LGD4) RATINGS RATIONALE Valvoline's credit profile reflects its leading market positions in retail (conventional and synthetic) passenger car lubricants, the quick lube DIFM (Do It For Me) market, and the distributor and direct installer service markets in the US. The ratings also reflect strong and relatively stable margins in this mostly recession resistant space, which is largely tied to miles driven and requirements for periodic oil changes in the auto and truck markets. The ratings also reflect increasing capex and the growing importance of acquisitions to support growth in the instant Oil change Quick Lube segment and to offset competitive and secular pressures in the other two segments, including the impact of the longer term decline trend due to growth of electric vehicles. More immediate trends include the benefit to the Core NA and International segments from the growing share of synthetic oils in new vehicles, but this has been recently offset by volume pressure due to price differences versus less expensive private label brands. The company guided EBITDA up slightly to $495-$515 million range for 2020 on its recent 1Q earnings call reflecting moderating promotional pressure from private label as well as cost reduction efforts and despite base oil cost headwinds. As of 31 December 2019, Valvoline's credit metrics were supportive of the rating with adjusted leverage (Debt/EBITDA) of roughly 3.7x and Retained Cash Flow/Debt (RCF/Debt) of roughly 17%. Pro forma for this transaction Moody's expects adjusted gross leverage to increase slightly to 3.9x while net leverage will be initially unchanged. Moody's continues to expect M&A activity and share repurchase activity to be financed with free cash flow and in some cases additional debt leaving leverage mostly unchanged in the mid 3x range as EBITDA grows. Moody's expects Valvoline to have adequate liquidity including the $475 million committed revolver with virtually full availability as of December 31, 2019, roughly $162 million in balance sheet cash, or $262 million in cash on a pro forma basis, and positive free cash flow from operations, excluding M&A activity that might arise. Maintenance covenants on the revolver include gross leverage (maximum 4.5 times) and coverage (minimum 3.0 times) tests with ample cushion expected on a one year forward basis. The company also has access to a $175 million accounts receivable securitization facility. As of December 31, 2019 there are no near-term facilities with outstanding balances. The most significant ESG issue stems from the longer term trend in EVs, which use far less engine lubes than conventional internal combustion engine (ICE) vehicles and represent a long term headwind to demand for the company's products. However, significant penetration by EVs is likely still many years away, and the total global count of existing vehicles, which will continue to grow and require periodic oil changes, will remain substantially larger than new vehicle sales for decades to come. Social issues, while high in profile given the connection with the transportation space and its carbon footprint, are still viewed as only modest in the credit profile due to the very long tail that lube products are expected to sustain, albeit against secular demand pressure. As a public company, governance issues are also viewed as modest and supported by what has thus far been adherence to conservative financial policies. The stable outlook anticipates leverage remaining at or below 3.5x and RCF/Debt to remain near or above 20% for the foreseeable future, excluding the impact from additional acquisitions. The ratings also anticipate small to moderate bolt-on acquisitions that do not spike leverage substantially above 3.5x on a sustained basis, or with a delayed recovery in leverage following larger acquisitions. Prospects for an upgrade are currently limited given the importance of M&A in the growth of the quick lubes segment, as well as the limited track record as an independent company. However, successful execution in profitable store growth in the quick lube segment and overall margin stability and expansion could eventually support a higher rating if adjusted leverage were to sustainably fall below 2.5 times. Moody's could consider a downgrade if adjusted leverage to rises significantly above 3.5 times or if retained cash flow to debt falls below 10%, on a sustained basis; due to a shift in financial policies, poor performance, aggressive share repurchases, or if acquisitions that cause leverage to spike meaningfully above 3.5x with delayed recovery. Valvoline Inc., headquartered in Lexington, Kentucky, is a marketer of premium-branded automotive and commercial lubricants. The company sells its products through over 30,000 retail outlets and about 1,350 franchised and company-owned stores. Its three business segments are Core North America (39% of sales), which includes "Do-It-Yourself" (DIY), "Do-It-For-Me" (DIFM), and commercial and industrial (C&I); Quick Lubes (37% of sales); and International (24% of sales), which includes passenger and heavy duty branded products sold to about 140 countries outside the US and Canada. The company has revenues of over $2.44 billion for the December 31, 2019 LTM period. The principal methodology used in these ratings was Chemical Industry published in March 2019. VALVOLINE INC: S&P Rates New $500MM Unsecured Notes 'BB' -------------------------------------------------------- S&P Global Ratings assigned its 'BB' issue-level rating and '4' recovery rating to Valvoline Inc.'s proposed $500 million senior unsecured notes due 2030. The '4' recovery rating indicates S&P's expectation for average (30%-50%; rounded estimate: 30%) recovery in the event of a payment default. S&P expects the company to use the net proceeds from these notes to repay its outstanding senior unsecured notes due 2024 and for general corporate purposes. Pro forma for the transaction, Valvoline has about $1.5 billion of total debt outstanding. All of S&P's existing ratings on the company, including its 'BB' issuer credit rating and 'BBB-' senior secured issue-level rating, remain unchanged. S&P's ratings on Valvoline continue to reflect the company's well-known and reputable brand name, its defensible position as the third-largest competitor in do-it-yourself (DIY) lubricants by volume, its satisfactory margins, and relatively stable profitability. The ratings also incorporate the company's substantial brand concentration and moderate customer focus with several large automotive part retailers and installers. S&P also accounts for the intense competition the company faces from several large competitors that possess substantially greater financial and marketing resources and its participation in a low-growth industry that is subject to volatile base-oil prices, the amount of vehicle miles driven, and potential improvements in engine technology that could further reduce oil usage. S&P forecasts that Valvoline's debt to EBITDA will be in the low-3x area while its funds from operations (FFO)-to-debt ratio is in the low-20% area by the end of fiscal year 2020. VEA INVESTMENTS: March 24 Plan & Disclosures Hearing Set -------------------------------------------------------- Debtor VEA Investments LLC filed with the U.S. Bankruptcy Court for the Middle District of Florida, Orlando Division, a proposed Disclosure Statement and a Plan of Reorganization. On Jan. 21, 2020, Judge Karen S. Jennemann conditionally approved the Disclosure Statement and established the following dates and deadlines: * An evidentiary hearing will be held on March 24, 2020, at 09:30 AM in Courtroom 6A, 6th Floor, George C. Young Courthouse, 400 West Washington Street, Orlando, FL 32801 to consider and rule on the disclosure statement and to conduct a confirmation hearing. * Creditors and other parties in interest will file with the clerk their written acceptances or rejections of the plan (ballots) no later than seven days before the date of the Confirmation Hearing. * Any party desiring to object to the disclosure statement or to confirmation shall file its objection no later than seven days before the date of the Confirmation Hearing. * The Debtor will file a ballot tabulation no later than four days before the date of the Confirmation Hearing. A full-text copy of the order dated Jan. 21, 2020, is available at https://tinyurl.com/v34vpe2 from PacerMonitor.com at no charge. About VEA Investments VEA Investments LLC owns seven properties in Orlando, Florida, having a total current value of $1.67 million. VEA Investments filed a petition for relief under Chapter 11 of Title 11 of the United States Code (Bankr. M.D. Fla. Case No.19-04148) on June 25, 2019. In the petition signed by Viviana M. Tejada Cruz, managing member, the Debtor disclosed $1,677,350 in assets and $1,602,591 in liabilities. Jeffrey Ainsworth, Esq. at Bransonlaw, PLLC, is the Debtor's counsel. VIZITECH USA: Gets Interim Court Nod on Cash Use Thrul April 20 --------------------------------------------------------------- Judge James P. Smith authorized ViziTech USA, LLC to use cash collateral in the ordinary course of the business, pursuant to the budget, effective as of the Petition Date and continuing through the date of the final hearing on the motion. The budget provides for $63,711 in total operating expenses for February 2020, including $10,000 in cost of goods purchases and $32,063 in subcontractor salaries. The Court directed the Debtor to establish a DIP account at a depository institution authorized by the U.S. Trustee. To the extent the Debtor establishes a DIP account with United Community Bank, UCB agrees not to set-off or otherwise access any funds deposited into the DIP account with further Court order. UCB has an interest in accounts, including deposit accounts, money or rights to payment which constitute cash collateral on account of: * a $148,000 promissory note issued by the Debtor in favor of UCB, secured by the Debtor's real property at 103 East Sumter St., Eatonton, Georgia, * a $317,689 promissory note secured by an interest in all of the Debtor's furniture, fixtures and equipment, and * a $651,261 promissory note secured by an interest in the Debtor's accounts receivables. The Court ruled that UCB will be granted, among others, a valid, attached, choate, enforceable, perfected and continuing security interest in and liens upon the post-petition assets of the Debtor of the same type, character, nature, extent and validity as UCB's liens attached to the Debtor's assets before the Petition Date. The Debtor will also pay UCB $10,000 as adequate protection on February 28, 2020 and continuing on March 20, 2020 and April 20, 2020. The use of cash collateral and the interim order is limited from the Petition Date through April 20, 2020, a copy of which is available at https://is.gd/Z4VQGK from PacerMonitor.com free of charge. UCB may be reached at: United Community Bank c/o Brett Brown 1001 Polk Street Marietta, Georgia 30064 About Vizitech USA ViziTech USA, LLC -- https://www.vizitechusa.com/ -- is an education and training company specializing in 3D technology, augmented reality (AR), and virtual reality (VR) learning programs. The Company takes complex concepts and processes, such as frog dissection in the classroom or safety training in the workplace, and recreate them virtually for an interactive, safe learning experience. The company serves school districts across the southeast, commercial clients, and government clients. On Dec. 26, 2019, the company sought Chapter 11 protection (Bankr. M.D. Ga. Case No. 19-52416) in Macon, Georgia. On the Petition Date, the Debtor was estimated to have between $100,000 and $500,000 in assets, and between $1 million and $10 million in liabilities. The petition was signed by Charles Stewart Rodeheaver, sole member and manager. Judge James P. Smith oversees the case. Stone & Baxter, LLP, is serving as the Debtor's counsel. WOODFORD EXPRESS: S&P Lowers Senior Secured Debt Rating to 'B' -------------------------------------------------------------- S&P Global Ratings revised the outlook on Woodford Express LLC to negative from positive to capture the deterioration in its main customer's creditworthiness, along with lower forward-looking EBITDA that results in higher leverage. S&P affirmed its 'B' issuer credit rating. S&P lowered the issue credit rating on the company's senior secured debt to 'B' from 'B+', based on the revised recovery score of '3' (rounded estimate: 65%), indicating meaningful recovery. The negative outlook captures the significant exposure to Gulfport (B/Negative/--) and Woodford's stand-alone creditworthiness that now reflects leverage of over 5.5x for the next two years and elevated volumetric risk that is driven by upstream drilling forecasts that S&P expects to remain modest. S&P expects Woodford's gathering and processing system in the SCOOP basin to remain underutilized in 2020 and 2021 because of lower well counts on the company's dedicated acreage and lower forecasted volumes following the decline of natural gas prices over the past several months. As a result, S&P now believes run-rate EBITDA in 2020 and 2021 will be significantly lower that the rating agency previously forecast, leading to leverage that exceeds 6x in 2020 and averages over 5.5x over the next two years. This indicates the company will remain highly leveraged. The negative outlook reflects S&P's expectation that leverage will remain elevated over the next two years, with debt to EBITDA in 2020 particularly stressed given volume pressure on WEX's acreage. S&P expects debt to EBITDA to exceed 6x in 2020 and average above 5.5x over the next few years. The negative outlook also reflects the negative outlook on Gulfport Energy Corp., which contributes over 70% of volumes and is currently under pressure from low gas prices and the need to refinance upcoming maturities. "We could downgrade the company if we lower its main counterparty, Gulfport, to 'B-' or lower, which would likely be the result of continued low gas prices or liquidity stress. We could consider lowering the rating if we expect debt to EBITDA to stay above 5.5x on a sustainable basis, which would likely be due to lower-than-expected volumes and EBITDA in the absence of material paydown of debt," S&P said. "We could revise the outlook to stable if we expect volumes on its system to remain relatively stable or improve gradually such that debt to EBITDA is sustained materially below 5.5x and Gulfport's outlook was also revised to stable at the current rating of 'B'," the rating agency said. YAK ACCESS: Moody's Affirms B2 CFR, Outlook Stable -------------------------------------------------- Moody's Investors Service affirmed Yak Access, LLC's B2 Corporate Family Rating, B2-PD Probability of Default Rating and the Caa1 rating on its $180 million 2nd lien term loan. At the same time, Moody's upgraded the company's $680 million 1st lien term loan rating to B1 from B2 and assigned a B1 rating to its $125 million revolving line of credit. The first lien credit facilities were upgraded to reflect the change in the company's capital structure from what was anticipated when the initial ratings were assigned. Moody's has withdrawn the Ba3 rating on Yak's $125 million super priority revolving line of credit since this facility was never established. The ratings outlook remains stable. "Yak Access LLC's B2 corporate family rating reflects its strong competitive position and moderate financial leverage, as well as its relatively small size, limited end market diversity and its high level of debt versus revenues," said Michael Corelli, Moody's Vice President -- Senior Credit Officer and lead analyst for Yak Access LLC. Upgrades: Issuer: Yak Access, LLC Senior Secured 1st Lien Term Loan, Upgraded to B1 (LGD3) from B2 (LGD3) Assignments: Issuer: Yak Access, LLC Senior Secured 1st Lien Revolving Credit Facility, Assigned B1 (LGD3) Affirmations: Issuer: Yak Access, LLC Probability of Default Rating, Affirmed B2-PD Corporate Family Rating, Affirmed B2 Senior Secured 2nd Lien Term Loan, Affirmed Caa1 (LGD5 from LGD6) Withdrawals: Issuer: Yak Access, LLC Senior Secured Super Priority Revolving Credit Facility, Withdrawn, previously rated Ba3 (LGD2) Outlook Actions: Issuer: Yak Access, LLC Outlook, Remains Stable RATINGS RATIONALE Yak Access, LLC's B2 corporate family rating reflects its moderate financial leverage, high profit margins and adequate liquidity. The rating also reflects its strong market position with only a few major competitors in the end markets it serves, with many of those competitors unable to provide the same breadth and volume of products and range of services. In addition, the company serves mostly blue-chip customers in the midstream pipeline and power line sectors, both of which have good near-term prospects. The company's rating is constrained by its high absolute level of debt at about 180% of LTM revenues, its modest interest coverage, relatively small scale, limited end market diversity, moderate customer concentration and the cyclicality of its key midstream pipeline end market. Yak's operating performance has moderately improved in 2019 due to increased mat availability and stronger profit margins. The margin expansion has been attributable to higher margins achieved on mat sales and a change in revenue mix towards higher margin mat leases versus mat sales. Nevertheless, Yak's credit metrics have moderately weakened due to the debt financed acquisition of Klein's Restoration Services in July 2019 and elevated capital expenditures related to investments in its mat fleet to support high demand and continued growth. However, Yak's pro forma adjusted leverage ratio of about 4.0x (Debt/EBITDA) and its interest coverage of around 1.5x (EBITA/Interest) are supportive of its B2 rating. Yak Access is expected to maintain adequate liquidity and has no meaningful debt maturities prior to the maturity of its $125 million revolver in July 2023. However, the company funded the acquisition of Klein's Restoration Services with revolver borrowings, which increased to $90 million as of September 2019. This reduced its liquidity to $41.5 million including $6.5 million in cash and $35 million of availability on its $125 million revolver. The company was expected to generate free cash flow beginning in the fourth quarter of 2019 and to use that cash to pay down revolver borrowings. The stable ratings outlook presumes the company's operating results will moderately improve over the next 12 to 18 months and it will maintain credit metrics that support its rating. The ratings could be upgraded if the company sustains strong profit margins, enhances its scale and end market diversity and raises its interest coverage above 2.0x on a sustained basis. However, its relatively small scale will limit its upside ratings potential. Negative rating pressure could develop if the company has a weaker than expected operating performance that results in negative free cash flow and a material deterioration in its credit metrics. The leverage ratio rising above 4.5x or the interest coverage ratio persisting below 1.5x could lead to a downgrade. A significant reduction in borrowing availability or liquidity could also result in a downgrade. Yak Access, LLC, headquartered in East Columbia, Mississippi, is a specialty equipment leasing and logistics company focused on temporary access solutions to remote construction sites mostly serving energy infrastructure repair and development work in North America. The company generated revenues of about $520 million during the twelve months ended September 30, 2019. Platinum Equity owns 50.1% of Yak Access, LLC and the Jones Companies and Beasley Forest Products jointly own the other 49.9%. The principal methodology used in these ratings was Construction Industry published in March 2017. ZVAH INC: A to Z Construction to Have $356K Unsecured Claim ----------------------------------------------------------- In Zvah Inc. and and Convivium Catering Inc.'s Chapter 11 cases, A to Z Construction Group Inc. filed Claim No. 6 in the amount of $356,166. A to Z filed a mechanic's lien against the Debtor's premises located at 37 Canal Street/6 Ludlow Street, New York. A disclosure statement was filed by the Debtors on Nov. 25, 2019, referring to a small business plan under Chapter 11 of the Bankruptcy Code filed by the Debtors on Nov. 25, 2019. The parties engaged in settlement negotiations regarding confirmation of the Plan and have agreed that A to Z Construction will vacate the mechanic's lien and support confirmation of the Plan and the Debtor will agree not to object to Claim No. 6 pursuant to the terms of Stipulation. The Debtors and A to Z agree to the following: * The Debtors agree not to object to Claim No. 6 and agree that Claim No. 6 shall be allowed as a general unsecured claim pursuant to the Plan in the amount of $356,166 and a secured claim in the amount of $35,166. * A to Z agrees to submit a ballot to votes to accept the Plan. * Provided that the Plan is confirmed by the Court, the Debtors agree that Claim No. 6 will be paid a pro rata distribution over 60 months pursuant to Article 4.01 of the Plan. The Debtors will pay the secured claim of A to Z in full and provided no less than a 10% distribution on the unsecured claim. No payments shall be held in escrow but shall be made by the Debtors directly to A to Z. * The debt to A to Z shall be secured by a security interest in substantially all of the assets of the Debtors. Upon approval of this Agreement, A to Z shall be permitted to file a UCC-1 financing statement to perfect the security interest. A full-text copy of the Settlement and Plan support Agreement dated Jan. 21, 2020, is available at https://tinyurl.com/vwdn4at from PacerMonitor.com at no charge. A to Z Construction is represented by: Steven R. Yuniver, Esq. 710 Avenue U Brooklyn, New York 11223 Telephone (718)402-2240 E-mail: steven@sypel.com About Zvah Inc. Zvah operates a restaurant located at 37 Canal Street, New York, under the name "Brigitte." Convivium operates a catering company, and pursuant to the Debtors' reorganization strategy, both Debtors will be operating out of the Zvah premises. Zvah sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 19-10318) on Feb. 1, 2019, estimating less than $100,000 in assets and at least $500,000 in liabilities. Convivium Catering Inc. sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 19-42261) on April 15, 2019, estimating less than $50,000 in assets and less than $100,000 in liabilities. Attorneys for the Debtors: LAWRENCE F. MORRISON BRIAN J. HUFNAGEL MORRISON TENENBAUM PLLC 87 Walker Street, Floor 2 New York, New York 10013 Telephone: (212) 620-0938 Facsimile: (646) 390-5095 ********* 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. 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