PE Debt Watch (Upgrades and Downgrades)

As usual, we have a week’s worth of ratings actions on the debt of LBO-backed companies from ratings agencies Standard & Poor’s Ratings Services and Moody’s Investors Service. This week is apparently Warburg Pincus week, as the firm’s portfolio companies make up two of the week’s three ratings changes.

Warburg Pincus portfolio company Antero Resources was downgraded on its decision to take on $100 million in new debt to pay down another facility. Meanwhile the firm’s energy company, Bill Barrett Corp., was upgraded after the company increased its commitment under the company’s unrated revolving credit facility.

And CI Capital’s Ply Gem received another upgrade (last week was from Moody’s) on its new issuance. The company is receiving “unsolicited” ratings from S&P, which indicates CI isn’t being generous with information on the company for the ratings agencies to do their jobs with. Call this a victory for the watchdogs? I guess?

Company: Antero Resources LLC
Sponsor: Warburg Pincus
Action: S&P lowered its issue-level rating on Antero’s existing $375 million senior unsecured notes due 2017 to ‘B’ from ‘B+’.
Highlight: Antero Resources is planning a $100 million add-on to the existing $375 million senior unsecured notes. Denver-based Antero plans to use the proceeds from the notes offering to repay outstanding borrowings under its credit facility.

Company: Ply Gem Industries
Sponsor: CI Capital Partners
Action: S&P raised its (unsolicited) corporate credit rating the company to ‘CCC+’ from ‘CCC’. S&P also raised the issue-level rating on the company’s senior secured notes to ‘CCC+’ (the same as the corporate credit rating) from ‘CCC’.
Highlight: The ratings upgrade follows the company’s issuance of $150 million of new 13.125% senior subordinated notes due 2014, proceeds of which will be used to refinance approximately $141.2 million principal amount of its outstanding 9% senior subordinated notes due 2012. “We think the offering and refinancing transaction will reduce Ply Gem’s outstanding debt and lower its interest costs,” said Standard & Poor’s credit analyst Tobias Crabtree

Company: Bill Barrett Corp.
Sponsor: Warburg Pincus LLC is a sponsor.
Action: S&P raised its issue-level rating on the company’s unsecured debt to ‘BB-‘ (the same as the corporate credit rating) from ‘B+’.
Highlight: “These rating actions reflect a recent increase in the commitment under the company’s unrated revolving credit facility to $592.8 million from $537.5 million as well as updated reserve values,” said Standard & Poor’s credit analyst Amy Eddy.

View Past Downgrade and Upgrade Lists Here