The Upgrade: Episode 29: Cash Flow Drought, Refinancing Wall Heighten Rating Risks In Business And Technology Services
Release Date: 08/03/2023
Story Behind Cerba-Chrome Holdco SAS
CLOs Uncovered
Hina and Sandeep discuss Cerba with Remi Bringuier, discussing our current expectations for the company's performance and the areas we are closely monitoring. Our aim is to provide market participants with further advanced analytical insight into Corporate Credits, CLOs and Leveraged Finance deals, with S&P Global Ratings regular podcast, based on key features we’re seeing in corporate credits and sectors that CLOs are exposed to.
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What's New For CLOs?
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After the summer break, Hina and Sandeep are joined by John Finn to discuss our recent Structured Finance conference, new features in CLO documentation, recent CLO performance, and future challenges faced by the market. Our aim is to provide market participants with further advanced analytical insight into Corporate Credits, CLOs and Leveraged Finance deals, with S&P Global Ratings regular podcast, based on key features we’re seeing in corporate credits and sectors that CLOs are exposed to.
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Story Behind Ardagh Group And Its Debt Restructuring Risk
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Series 6, Episode 5: Before we all break for summer, Hina & Sandeep discuss Ardagh Group with Desiree Menjivar over an in-depth analysis of Ardagh’s recent rating action and insights into the key factors shaping the company's performance, and the areas we are closely monitoring.
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How Does ASDA, Bellis Finco PLC’s, Rating Stack Up
CLOs Uncovered
Leveraged Finance & CLOs Uncovered Podcast: How ASDA’s Parent, Bellis Finco PLC, compares with other food retailers in a highly competitive UK landscape. Hina & Sandeep have a discussion with Raquel on credit fundamentals of Asda and its recent refinancing and S&P’s expectation for a future trajectory. Our aim is to provide market participants with further advanced analytical insight into Corporate Credits, CLOs and Leveraged Finance deals, with S&P Global Ratings regular podcast, based on key features we’re seeing in corporate credits and sectors that CLOs are exposed...
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The Credit Fundamentals of Merlin
CLOs Uncovered
In our latest episode, Hina & Sandeep have a discussion with Alphee Roumens on how Merlin continued to access capital markets to finance further growth and focus on its evolution post covid era and the areas we closely monitor.
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Uncovering Our Insights On Altice France Following It’s Recent Rating Action
CLOs Uncovered
Hina & Sandeep discuss Altice France with Justine Miquee over an in-depth analysis of Altice France's recent rating action and insights into the key factors shaping the company's performance, and the areas we are closely monitoring.
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How NordAnglia (Bach Finance) Continues To Access Capital Markets
CLOs Uncovered
Series 6, Episode 1: Hina & Sandeep have a discussion with Raquel on credit fundamentals of Nord Anglia and despite raising $600 million term loan add-on, it is able to preserve its ratings, though reducing our recovery estimate for its senior secured debt.
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The Upgrade: Episode 33: Testing Private Debt's Resilience Through The Credit Estimate Lens
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In Episode 33, Scott Tan, Analytical Manager and Managing Director of U.S. Credit Estimates, along with Denis Rudnev, Director of Leveraged Finance at S&P Global Ratings, delved into critical insights from their discussion on "Testing Private Debt's Resilience Through The Credit Estimate Lens." They analyzed over 2,000 credit estimated (CE) issuers, totaling more than $400 billion in outstanding debt, to evaluate the resilience of middle-market issuers amidst the challenges posed by increasing interest rates and margin erosion. Related Document Link:
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How Snooze Drag Helps Borrowers Extend Loan Maturities
CLOs Uncovered
Series 5, Episode 5: Hina & Sandeep wrap up the year with Tia Zhang and discuss a workaround seen in loan documentation allowing borrowers to extend maturities more easily.
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The Upgrade: Episode 32: Creative Structuring Helps Trinseo PLC
CLOs Uncovered
In Episode 32, Steve H Wilkinson, Managing Director of Leveraged Finance at S&P Global Ratings, discusses an interesting case study of Trinseo’s creative debt structuring that helped the firm procure new debt financing to address pending near-term maturities. Related Document Link:
info_outlineIn episode 29, Nishit Madlani, the U.S. sector lead for business services and autos at S&P Global Ratings and Ben Hirsch, an associate director within the S&P’s U.S. business services team, discuss their latest article titled: Cash Flow Drought, Refinancing Wall Heighten Rating Risks In Business And Technology Services; But Some Sectors Are An Oasis.
Key takeaways from the article include:
- Looming refinancing risks and weaker cash flow prospects amid tight credit conditions will weigh on the business and technology services sector through 2025.
- About 57% of U.S. issuers are projected to generate weaker free operating cash flow (FOCF) in 2023 due to higher interest costs, potentially complicating refinancing efforts.
- With a large majority of the sector coverage rated 'B' or below, we expect an increase in downgrades to the 'CCC' category as distressed exchanges and payment default scenarios intensify.
- Distributors, facilities maintenance providers, and software and information services providers are most vulnerable to downside risks, while providers of education and publishing services, security and safety services, and payment and insurance services remain relatively resilient.
Links to articles discussed in the podcast:
Cash Flow Drought, Refinancing Wall Heighten Rating Risks In Business And Technology Services; But Some Sectors Are An Oasis: https://www.spglobal.com/ratings/en/research/articles/230627-cash-flow-drought-refinancing-wall-heighten-rating-risks-in-business-and-technology-services-but-some-sector-12768327
What Rising Interest Rates Could Mean For U.S. Business And Technology Services Companies Rated 'B' And 'B-': https://www.spglobal.com/ratings/en/research/articles/230118-what-rising-interest-rates-could-mean-for-u-s-business-and-technology-services-companies-rated-b-and-b-12613219