News Column

Fitch Publishes Capital Structure and Covenant Analysis for 50 Largest U.S. Leveraged Issuers

July 8, 2014

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has published the latest issue of its Capital Structure and Covenant Analysis for 50 Largest U.S. Leveraged Issuers report. In conducting its analysis, Fitch observed the following trends:

--Robust Valuation Multiples: The average enterprise value/EBITDA market multiple for the Fitch 50 is unchanged from last edition's 11.1x, which still exceeds the 10.2x average market valuation multiple across all sectors.

--Credit Metrics Converge: Compared to the last edition's tallies, credit metrics of the companies in this edition converge. The number of companies with a leverage ratio below 5.0x decreased from 23 to 19, and the count of those with a leverage ratio above 8.0x also decreased from 13 to 11.

--Improved Covenant Headroom: Covenant headroom improved for the 29 issuers that have maintenance financial covenants. Only six companies are in a position where an EBITDA decline of 20% or less would trip their tightest covenant, and only one has headroom of just 10%.

New in this edition are the standardization of the treatment of Limitations on Debt Incurrence and Limitations on Restrictive Payments, and the improved readability with respect to cross default and cross acceleration.

Published annually, the 'Fitch 50' is a comprehensive report compiling organizational structure diagrams and credit agreement/indenture summaries. The structural analyses focus on detailed organizational charts that delineate structural relationships among various affiliate entities and debt issuances. Simplified, though still in-depth, the issuance summaries recapitulate essential terms in bank agreements and bond structures, such as seniority, security, guarantee, negative covenants, financial covenants, etc.

The full report 'Fitch 50' is available at www.fitchratings.com/sectors/Corporate Finance/Leveraged Finance, or by clicking on the link above.

For more information, visit: 'www.fitchratings.com/usleveragedfinance'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

Fitch 50 Europe - July 2013 (July 2013)

Fitch Telecom & Cable Company Handbook (A Detailed Review of Companies in the U.S. and Canada Telecom and Cable Sector) (June 2013)

H.J. Heinz Company (June 2013)

Hospitals Credit Diagnosis (Implications of the ACA Slowly Taking Shape) (June 2013)

SUPERVALU Inc. (June 2013)

U.S. Leveraged Finance Multiple EV-aluator (May 2013)

Leveraged Finance Annual Manual for the Americas (April 2013)

Specialty Pharmaceuticals Snapshot - Key High Yield Consolidator Trends and Targets (April 2013)

Technology Handbook (April 2013)

U.S. Leveraged Finance Stats Quarterly - Fourth-Quarter 2012 (April 2013)

High-Yield Healthcare Checkup: Comprehensive Analysis of High-Yield U.S. Healthcare Companies (January 2013)

U.S. Leveraged Finance Spotlight Series Community Health Systems, Inc. (October 2012)

Applicable Criteria and Related Research: Fitch 50 (Structural Profiles of 50 Leveraged U.S. Credits)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=752040

Leveraged Finance Annual Manual for the Americas

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=704760

Specialty Pharmaceuticals Snapshot - Key High Yield Consolidator Trends and Targets

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=706298

Technology Handbook

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=705259

U.S. Leveraged Finance Stats Quarterly ??? Fourth-Quarter 2012

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=705355

High-Yield Healthcare Checkup: Comprehensive Analysis of High-Yield U.S. Healthcare Companies

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=700377

U.S. Leveraged Finance Spotlight Series Community Health Systems, Inc.

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=687271

Fitch 50 Europe - July 2013

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=712340

Fitch's Telecom & Cable Company Handbook (A Detailed Review of Companies in the U.S. and Canada Telecom and Cable Sector)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=706487

H.J. Heinz Company

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=712141

Hospitals Credit Diagnosis (Implications of the ACA Slowly Taking Shape)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=704315

SUPERVALU Inc.

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708799

U.S. Leveraged Finance Multiple EV-aluator

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=707472

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.



Fitch Ratings

John Shen-Sampas

Director

+1-212-612-7881

Fitch Ratings, Inc.

33 Whitehall St.

New York, NY 10004

or

Sharon Bonelli

Managing Director

+1-212-908-0581

or

Media Relations:

Brian Bertsch, +1-212-908-0549 (New York)

brian.bertsch@fitchratings.com


Source: Fitch Ratings


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